  We present the first high-resolution, X-ray image of the circumnuclear
regions of the Seyfert 1 galaxy NGC 3516, using the Chandra X-ray Observatory
(CXO). All three of the CXO observations reported were performed with one of
the two grating assemblies in place, and here we restrict our analysis to
undispersed photons (i.e. those detected in the zeroth-order). A
previously-unknown X-ray source is detected approx 6 arcsec (1.1 h_{75}^{-1}
kpc) NNE of the nucleus (position angle approx 29 degrees) which we designate
CXOU 110648.1+723412. Its spectrum can be characterized as a power law with a
photon index Gamma ~ 1.8--2.6, or as thermal emission with a temperature
kT~0.7--3 keV. Assuming a location within NGC 3516, isotropic emission implies
a luminosity L ~ 2--8e39 h_{75}^{-2} erg s^{-1} in the 0.4--2 keV band. If due
to a single point source, the object is super-Eddington for a 1.4 M_sun neutron
star. However, multiple sources or a small, extended source cannot be excluded
using the current data. Large-scale extended X-ray emission is also detected
out to ~10 arcsec (~1.7 h_{75}^{-1} kpc) from the nucleus to the NE and SW, and
is approximately aligned with the morphologies of the radio emission and
extended narrow emission line region (ENLR). The mean luminosity of this
emission is 1--5e37 h_{75}^{-2} erg s^{-1} arcsec^{-2}, in the 0.4--2 keV band.
Unfortunately the current data cannot usefully constrain its spectrum. These
results are consistent with earlier suggestions of circumnuclear X-ray emission
in NGC 3516. If the extended emission is due to scattering of the nuclear X-ray
continuum, then the pressure in the X-ray emitting gas is at least two orders
of magnitude too small to provide the confining medium for the ENLR clouds.
