  In quantum mechanics, observing is not a passive act. Consider a system of
two quantum particles A and B: if a measurement apparatus M is used to make an
observation on B, the overall state of the system AB will typically be altered.
When this happens no matter which local measurement is performed, the two
objects A and B are revealed to possess peculiar correlations known as quantum
discord. Here we demonstrate experimentally that the very act of local
observation gives rise to an activation protocol which converts discord into
distillable entanglement, a stronger and more useful form of quantum
correlations, between the apparatus M and the composite system AB. We adopt a
flexible two-photon setup to realize a three-qubit system (A,B,M) with
programmable degrees of initial correlations, measurement interaction, and
characterization processes. Our experiment demonstrates the fundamental
mechanism underpinning the ubiquitous act of observing the quantum world, and
establishes the potential of discord in entanglement generation.
