  The BL Lac object Mrk 421 was observed on May 25, 2000 during the XMM -
Newton CAL/PV phase. The high throughput of the X-ray telescopes and the
spectral capabilities of the instruments allow an uninterrupted temporal and
spectral study of the source with unprecedented time resolution. Mrk 421 was
found at a relatively high state with a 2-6 keV flux of (1.3 - 1.9)E-10 erg
cm**-2 s **-1. The observed intensity variations by more than a factor of three
at highest X-ray energies are accompanied by complex spectral variations with
only a small time lag (tau = 265 {+116} {-102} seconds) between the hard and
soft photons. The (0.2-10) keV spectrum can be well fitted by a broken power
law and no absorption structures are found in the source spectrum at the high
spectral resolution of the transmission gratings.
