We report the detection of ongoing star formation in the prominent tidal arms near NGC 3077 (member of the M 81 triplet). In total, 36 faint compact H II regions were identified, covering an area of ∼ 4 × 6 kpc 2 . Most of the H II regions are found at H I column densities above 1 × 10 21 cm −2 (on scales of 200 pc), well within the range of threshold columns measured in normal galaxies. The H II luminosity function resembles the ones derived for other low-mass dwarf galaxies in the same group; we derive a total star formation rate of 2.6×10 −3 M ⊙ yr −1 in the tidal feature. We also present new high-resolution imaging of the molecular gas distribution in the tidal arm using CO observations obtained with the OVRO interferometer. We recover about one sixth of the CO flux (or M H2 ∼ 2 × 10 6 M ⊙ , assuming a Galactic conversion factor) originally detected in the IRAM 30 m single dish observations, indicating the presence of a diffuse molecular gas component in the tidal arm. The brightest CO peak in the interferometer map (comprising half of the detected CO flux) is coincident with one of the brightest H II regions in the feature. Assuming a constant star formation rate since the creation of the tidal feature (presumably ∼ 3 × 10 8 years ago), a total mass of ∼ 7 × 10 5 M ⊙ has been transformed from gas into stars. Over this period, the star formation in the tidal arm has resulted in an additional enrichment of ∆Z>0.002. The reservoir of atomic and molecular gas in the tidal arm is ∼ 3 × 10 8 M ⊙ , allowing star formation to continue at its present rate for a Hubble time. Such wide-spread, low-level star formation would be difficult to image around more distant galaxies but may be detectable through intervening absorption in quasar spectra.