We present an observation and rate measurement of the decay D0 -> K+pi-pi0
produced in 9/fb of e+e- collisions near the Upsilon(4S) resonance. The signal
is inconsistent with an upward fluctuation of the background by 4.9 standard
deviations. We measured the rate of D0 -> K+pi-pi0 normalized to the rate of
D0bar -> K+pi-pi0 to be 0.0043 +0.0011 -0.0010 (stat) +/- 0.0007 (syst). This
decay can be produced by doubly-Cabibbo-suppressed decays or by the D0 evolving
into a D0bar through mixing, followed by a Cabibbo-favored decay to K+pi-pi0.
We also found the CP asymmetry A=(8 +25 -22)% to be consistent with zero.Comment: 10 pages postscript, also available through
http://w4.lns.cornell.edu/public/CLN