  We present Hubble Space Telescope (HST) imagery and photometry of the active
galaxy Markarian 421 and its companion galaxy 14 arcsec to the ENE. The HST
images indicate that the companion is a morphological spiral rather than
elliptical as previous ground--based imaging has concluded. The companion has a
bright, compact nucleus, appearing unresolved in the HST images. This is
suggestive of Seyfert activity, or possibly a highly luminous compact star
cluster. We also report the results of high dynamic range long-slit
spectroscopy with the slit placed to extend across both galaxies and nuclei. We
detect no emission lines in the companion nucleus, though there is evidence for
recent star formation. Velocities derived from a number of absorption lines
visible in both galaxies indicate that the two systems are probably tidally
bound and thus in close physical proximity. Using the measured relative
velocities, we derive a lower limit on the MKN 421 mass within the companion
orbit (R \sim 10 kpc) of 5.9 \times 10^{11} solar masses, and a mass-to-light
ratio of >= 17. Our spectroscopy also shows for the first time the presence of
H\alpha and [NII] emission lines from the nucleus of MKN 421, providing another
example of the appearance of new emission features in the previously
featureless spectrum of a classical BL Lac object. We see both broad and narrow
line emission, with a velocity dispersion of several thousand km s^{-1} evident
in the broad lines.
