  We have measured the cross section $\sigma(e^+e^-\to \pi^+\pi^- \gamma)$ at
an energy $W=m_\phi=1.02$ GeV with the KLOE detector at the electron-positron
collider DA$\Phi$NE. From the dependence of the cross section on the invariant
mass of the two-pion system, we extract $\sigma(e^+e^-\to \pi^+\pi^-)$ for the
mass range $0.35<s<0.95$ GeV$^2$. From this result, we calculate the pion form
factor and the hadronic contribution to the muon anomaly, $a_\mu$.
