  We report Chandra X-ray observations of the supernova remnant N157B in the
Large Magellanic Cloud, which are presented together with an archival HST
optical image and a radio continuum map for comparison. This remnant contains
the recently discovered 16 ms X-ray pulsar PSR J0537-6910, the most rapidly
rotating young pulsar known.
  Using phase-resolved Chandra imaging, we pinpoint the location of the pulsar
to within an uncertainty of less than 1 arcsec. PSR J0537-6910 is not detected
in any other wavelength band. The X-ray observations resolve three distinct
features: the pulsar itself, a surrounding compact wind nebula which is
strongly elongated and a feature of large-scale diffuse emission trailing from
the pulsar. This latter comet tail-shaped feature coexists with enhanced radio
emission and is oriented nearly perpendicular to the major axis of the pulsar
wind nebula. We propose the following scenario to explain these features. The
bright, compact nebula is likely powered by a toroidal pulsar wind of
relativistic particles which is partially confined by the ram-pressure from the
supersonic motion of the pulsar. The particles, after being forced out from the
compact nebula (the head of the ``comet''), are eventually dumped into a bubble
(the tail), which is primarily responsible for the extended diffuse X-ray and
radio emission. The ram-pressure confinement also allows a natural explanation
for the observed X-ray luminosity of the compact nebula and for the unusually
small X-ray to spin-down luminosity ratio, compared to similarly energetic
pulsars. We estimate the pulsar wind Lorentz factor of N157B as about 4 times
10^6 (with an uncertainty of a factor about 2, consistent with that inferred
from the modeling of the Crab Nebula.
