  We present an X-ray study of the nuclear and extended emission of a nearby
Fanaroff & Riley class I (FR-I) radio galaxy CTD 86 based on the \xmm{}
observations. Two different components observed are : diffuse thermal emission
from hot gas ($kT\sim 0.79\kev$, $n_e\sim 10^{-3}{\rm cm^{-3}}$, $L_X \sim
5\times10^{42}{\rm erg s^{-1}}$ extended over $\sim 186{\rm kpc}$), and
unresolved nuclear emission exhibiting mild activity. The hot gaseous
environment of CTD 86 is similar to that found in groups of galaxies or in
bright early-type galaxies. No clear signatures of radio-lobe interaction with
the diffuse hot gas is evident in this case. X-ray emission from the nucleus is
well constrained by an intrinsically absorbed ($N_H \sim 5.9\times10^{22}{\rm
cm^{-2}}$) power law ($\Gamma \sim 1.5$) with $2-10\kev$ luminosity $L_X \sim
2.1\times10^{42}{\rm erg s^{-1}}$. We have measured the stellar velocity
dispersion, $\sigma=182\pm8\kms$, for the CTD 86 and estimated a mass
$M_{BH}\sim 9\times 10^7{\rm M_\odot}$ with $L_{bol}/L_{Edd} \sim
4\times10^{-3}$. The low $L_{bol}/L_{Edd}$ rate and high $L_X/L_{[O III]}$
ratio suggest that the central engine of CTD 86 consists of a truncated
accretion disk lacking a strong ionizing UV radiation and an inner hot flow
producing the X-ray emission. The truncated disk is likely to be inclined with
($i\sim40^\circ-50^\circ$) such that our line of sight passes through the outer
regions of a putative torus and thus results in high X-ray absorption. We have
also identified two bright X-ray sources, SDSS J142452.11+263715.1 and SDSS
J142443.78+263616.2, near CTD 86. SDSS J142452.11+263715.1 is a type 1 active
galactic nucleus at $z=0.3761$ and unabsorbed $0.3-10\kev$ X-ray luminosity
$L_X\sim 8 \times 10^{43}{\rm erg s^{-1}}$, while SDSS J142443.78+263616.2 is
probably a galaxy with an active nucleus.
