OBSERVATIONS Of Stellar occultations by asteroids have suggested that some may have satellites(1), But given the absence of any confirmatory evidence, the prevailing view has been that although such satellites probably do exist, they are likely to be rare(2). Here we report the discovery(3) by the Galileo spacecraft of a satellite associated with the asteroid 243 Ida, Although the satellite, Dactyl, is only 1.6 km across, it has been imaged with sufficient resolution for geological analysis, We describe the physical properties of Dactyl, with emphasis on its notably smooth shape, its crater population (which includes a crater chain) and its photometric properties, We find that, spectroscopically, Dactyl resembles both Ida and the other members of the Koronis asteroid family, implying a similar composition; small spectral differences may reflect a space weathering process that slightly alters the colours with time, We argue that Dactyl originated during the breakup of the Koronis parent body, and that satellites could be common around other asteroids (particularly members of asteroid families).