  We report on BeppoSAX observations of the X-ray transient XTE J0421+560 in
quiescence 156, 541, and ~690 days after the maximum of the 1998 April
outburst. In the first observation the source was soft with a power-law photon
index of 4.0 (+1.9 -0.9) and absorption, NH, of (1.1 +4.9 -1.1) X 10^21
atom/cm2. In the second observation, the source brightened by a factor ~15 in
the 1-10 keV energy range, became significantly harder with a photon index of
1.86 (+0.27 -0.32) and was strongly absorbed with NH = (4.0 +/- 0.8) X 10^23
atom/cm2. There is evidence for a narrow emission line in both spectra at \~7
keV. In the third observation, the source had faded by a factor ~$8 from the
previous observation to below the BeppoSAX detection level. It is possible that
these variations result from orbital motion of a compact object around the B[e]
star companion with the intense, absorbed, spectrum arising during passage
through dense circumstellar material. If this is the case, the system may be
continuing to exhibit periodic activity.
