  We present optical observations of a ULX in the nearby spiral galaxy IC 342.
This variable source has an average X-ray luminosity of some 10^{40} erg/s. At
the position of the source there is an ionized nebula (the "Tooth") having huge
dimensions (280 x 130 pc), much larger than normal supernova remnants. Our
optical spectra reveal highly supersonic expansion velocities and emission line
ratios typical of SNRs. It has been claimed that two [OIII] 5007 bright regions
in the nebula might be indicative of excitation by non-isotropic emission from
the ULX. However, our continuum subtracted [OIII] 5007 image reveals that
O^{++} ions are rather smoothly distributed in the nebula, fully consistent
with shock excitation. Within the nebula we find two candidate stars (V=24.0 &
24.6) in the Chandra X-ray error circle. Both are substantially reddened being
consistent with the patchy interstellar absorption. We will discuss the nature
of this source in the framework of what is currently known about optical
counterparts of ULXs.
