We report the observation of extreme UV lasing at 41.81 nm on the 4d 9 5d1 S 0 -4d 9 5p 1 P 1 transition in Xe IX, as proposed by Lemoff et al. [Opt. Lett. 19, 569 (1994)]. A 10-Hz circularly polarized 800-nm laser pulse with an energy of ϳ70 mJ and a duration of ϳ40 fs is longitudinally focused to a peak intensity of . 3 3 10 16 W͞cm 2 over a length of 8.4 nm in a differentially pumped cell containing 12 Torr of Xe gas. Laser amplification was observed with an estimated gain coefficient of 13 cm -1 and a total gain of exp(11).