  We carried out optical observations of the field of the X-ray pulsator
RXJ0806.3+1527. A blue V=21.1 star was found to be the only object consistent
with the X-ray position. VLT FORS spectra revealed a blue continuum with no
intrinsic absorption lines. Broad (v~1500 km/s), low equivalent width (about
-1/-6A) emission lines from the HeII Pickering series were clearly detected. B,
V and R time-resolved photometry revealed the presence of about 15% pulsations
at the 321s X-ray period, confirming the identification. These findings,
together with the period stability and absence of any additional modulation in
the 1min-5hr period range, argue in favour of the orbital interpretation of the
321s pulsations. The most likely scenario is thus that RXJ0806.3+1527 is a
double degenerate system of the AM CVn class. This would make RXJ0806.3+1527
the shortest orbital period binary currently known and one of the best
candidates for gravitational wave detection.
