Observation of B0-->pi0pi0.

We report the first observation of the decay B0->pi0pi0, using a 253/fb data sample collected at the Upsilon(4S) resonance with the Belle detector at the KEKB e+e- collider. The measured branching fraction is BF(B0->pi0pi0) = {2.32 +0.4-0.5(stat) +0.2-0.3(syst)} x 10^-6, with a significance of 5.8 standard deviations including systematic uncertainties. We also make the first measurement of the direct CP violating asymmetry in this mode.