  We report results of a Chandra observation of the X-ray luminous star-forming
galaxy Arp299 (NGC3690/IC694). We detect 18 discrete X-ray sources with
luminosities above ~10^39 erg\s (0.5-8.0 keV band), which contribute ~40% of
the total galactic emission in this band. The remaining emission is associated
with a diffuse component spatially coincident with regions of widespread
star-formation. We detect X-ray emission from both nuclei. One of the discrete
sources within the complex nuclear region of NGC 3690 is found to have a very
hard spectrum and therefore we associate it with the origin of the AGN-like
spectrum that has also been detected at high X-ray energies using Beppo-SAX.
