  We report the detection of a new satellite of M31, projected close to M32.
And VIII is tidally distorted, with length ~10 kpc and width a few kpc. It
contains 5-12 planetary nebulae (PNe) and 1-3 globular clusters, and has a
velocity of -204 km/s with respect to M31, some 350 km/s away from M32's
velocity. There are also about 4 x 10^5 solar masses of HI, well-separated from
the disk, at the same position and velocity. The satellite has luminosity of
1.2-2.4 x 10^8 solar luminosities, and a central surface brightness of order
\mu_V=24. Both these values are typical of Local Group dwarf galaxies. Its
surface brightness is some 6 magnitudes brighter than any of the stellar
streams found in the Milky Way or M31. The three associated globular clusters
have reddening consistent with foreground reddening from the Milky Way only,
making it likely that the satellite is in front of M31, unlike the giant tidal
stream of Ibata et al.(2001), which is behind M31 in the SE quadrant. However,
the major axis of And VIII is aligned with the western edge of this giant
stream, and we suggest that its unusual fan shape is caused by superposition of
two streams, the westernmost of which was tidally stripped from And VIII.
