  The h_c(1P1) state of charmonium has been observed in the reaction \psi(2S)
-> \pi0 h_c -> (\gamma\gamma)(\gamma\eta_c) using 3.08 million \psi(2S) decays
recorded in the CLEO detector. Data have been analyzed both for the inclusive
reaction, where the decay products of the \eta_c are not identified, and for
exclusive reactions, in which \eta_c decays are reconstructed in seven hadronic
decay channels. We find M(h_c)=3524.4 +/- 0.6 +/- 0.4 MeV which corresponds to
a hyperfine splitting \Delta M_{hf}(1P) \equiv <M(3PJ)>-M(1P1)=+1.0+/-0.6+/-0.4
MeV, and B(\psi(2S)->\pi0 h_c)xB(h_c->\gamma\eta_c)=(4. +/-0.8+/-0.7)x10^{-4}.
