We report the detection of optical and X-ray variability in the least
luminous known Seyfert galaxy, NGC4395. The featureless continuum changed by a
factor of 2 in 6 months, which is typical of more luminous AGN. The largest
variation was seen at shorter wavelengths, so that the spectrum becomes
`harder' during higher activity states. In a one week optical broad band
monitoring program, a 20% change was seen between successive nights. In a 1
month period the spectral shape changed from a power law with spectral index
alpha ~0 (characteristic of quasars) to a spectral index alpha ~2 (as observed
in other dwarf AGN). ROSAT HRI and PSPC archive data show a variable X-ray
source coincident with the galactic nucleus. A change in X-ray flux by a factor
\~2 in 15 days has been observed. When compared with more luminous AGN, NGC4395
appears to be very X-ray quiet. The hardness ratio obtained from the PSPC data
suggests that the spectrum could be absorbed. We also report the discovery of
weak CaIIK absorption, suggesting the presence of a young stellar cluster
providing of the order of 10% of the blue light. Using HST UV archive data,
together with the optical and X-ray observations, we examine the spectral
energy distribution for NGC4395 and discuss the physical conditions implied by
the nuclear activity under the standard AGN model. The observations can be
explained by either an accreting massive black hole emitting at about 10^(-3)
L_(Edd) or by a single old compact SNR with an age of 50 to 500 yr generated by
a small nuclear starburst.Comment: 19 pages, 9 figures, to appear in MNRA