Spatially resolved ROSAT X-ray and ground-based optical data for the southwestern region of the Cygnus Loop supernova remnant (SNR) reveal in unprecedented detail the very early stages of a blast-wave interaction with an isolated interstellar cloud. Numerous internal cloud shock fronts near the upstream flow and along the cloud edges are visible optically as sharp filaments of enhanced Hα emission. Faint X-ray emission is seen along a line of Balmer-dominated shock filaments north and south of the cloud with an estimated X-ray gas temperature of 1.2 × 106 K (0.11 keV), corresponding to a shock velocity of 290 km s-1. The main cloud body itself exhibits little or no X-ray flux. Instead, X-ray emission is confined along the northern and southernmost cloud edges, with the emission brightest in the downstream regions farthest from the shock front's current position. We estimate an interaction age of ~1200 yr, based on the observed shock-cloud morphology. Overall, the optical and X-ray properties of this shocked interstellar medium (ISM) cloud show many of the principal features predicted for a young SNR shock–ISM cloud interaction. In particular, one sees shocklet formation and diffraction inside the inhomogenous cloud, along with partial main blast-wave engulfment. However, several significant differences from model predictions are also present, including no evidence for turbulence along cloud edges, diffuse rather than filamentary [O III] emission within the main body of the cloud, unusually strong downstream [S II] emission in the postshock cloud regions, and confinement of X-ray emission to the cloud's outer boundaries.