Abstract Nearby, low-metallicity dwarf starburst galaxies hosting active galactic nuclei (AGNs) offer the best local analogs to study the early evolution of galaxies and their supermassive black holes (BHs). Here we present a detailed multiwavelength investigation of star formation and BH activity in the low-metallicity dwarf–dwarf galaxy merger Mrk 709. Using Hubble Space Telescope Hα and continuum imaging combined with Keck spectroscopy, we determine that the two dwarf galaxies are likely in the early stages of a merger (i.e., their first pass) and discover a spectacular ∼10 kpc long string of young massive star clusters (t ≲ 10 Myr; M _⋆ ≳ 10⁵ M _⊙) between the galaxies triggered by the interaction. We find that the southern galaxy, Mrk 709 S, is undergoing a clumpy mode of star formation resembling that seen in high-redshift galaxies, with multiple young clusters/clumps having stellar masses between 10⁷ and 10⁸ M _⊙. Furthermore, we present additional evidence for a low-luminosity AGN in Mrk 709 S (first identified by Reines et al. using radio and X-ray observations), including the detection of the coronal [Fe x] optical emission line. The work presented here provides a unique glimpse into processes key to hierarchical galaxy formation and BH growth in the early universe.