We report the discovery of a remarkable gamma-ray transient source near the Galactic plane, GRO J1838-04. This source was serendipitously discovered by EGRET in June 1995 with a peak intensity of 4 E(-6) ph/cm/cm/s (for photon energies larger than 100 MeV) and a 5.9 sigma significance. At that time, GRO J1838-04 was the second brightest gamma-ray source in the sky. A subsequent EGRET pointing in late September 1995 detected the source at a flux smaller than its peak value by a factor of 7. We determined that no radio-loud spectrally-flat blazar is within the error box of GRO J1838-04. We discuss the origin of the \ggg-ray transient source and show that interpretations in terms of AGNs or isolated pulsars are highly problematic. GRO J1838-04 provides strong evidence for the existence of a new class of variable gamma-ray sources.

15 pages, 4 postscript files with figures Accepted for publication in Astrophys. J. Letters, Feb. 3, 1997