  We present results from a 47 ks observation of the Andromeda galaxy, M31,
using the High-Resolution Camera of the Chandra X-Ray Observatory. We detect
142 point sources spanning three orders of magnitude in luminosity, from $L_X =
2\times 10^{35} \rm erg s^{-1}$ to $L_X = 2\times 10^{38} \rm erg s^{-1}$ in
the 0.1-10 keV band. The X-ray source location accuracy is better than
$1\arcsec$ in the central regions of the galaxy. One source lies within
$1.3\arcsec$ of SN 1885 but does not coincide with the UV absorption feature
identified as the supernova remnant. However, there is an optical transient,
which is likely an optical nova, at the location of the X-ray source. There is
a weak source, $L_X \sim 4 \times 10^{36} \rm erg cm^{2} s^{-1}$, coincident
with the nucleus of M31, and 14 sources coincident with globular clusters.
  Our observation has very high efficiency down to luminosities of $1.5\times
10^{36} \rm erg s^{-1}$ for sources within $5\arcmin$ of the nucleus. Comparing
with a ROSAT observation made 11 years earlier, we find that $0.46 \pm 0.26$ of
the sources with $L_X > 5 \times 10^{36} \rm erg s^{-1}$ are variable. We find
no evidence for X-ray pulsars in this region, indicating that the population is
likely dominated by low-mass X-ray binaries. The source density radial profile
follows a powerlaw distribution with an exponent of $1.25 \pm 0.10$ and is
inconsistent with the optical surface brightness profile. The x-ray point
source luminosity function is well fitted by a differential broken powerlaw
with a break at a luminosity of $(4.5^{+1.1}_{-2.2}) \times 10^{37} \rm erg
s^{-1}$. The luminosity function is consistent with a model of an aging
population of X-ray binaries.
