We report the detection of an absorbed central X-ray source and its strong, rapid, variability in NGC 4395, the least luminous Seyfert nucleus known. The X-ray source exhibits a number of flares with factors of 3–4 flux changes during a half-day ASCA observation. The shortest doubling time observed is about 100 s. Such X-ray variability is in contrast to the behaviour of other low-luminosity active galaxies and resembles that of higher luminosity Seyfert 1 galaxies. It provides further support for an accreting black hole model rather than an extreme stellar process in accounting for the nuclear activity of NGC 4395. The ASCA spectrum shows a power-law continuum of photon index Γ=1.7±0.3 with a Fe K line marginally detected at ∼6.4 keV. The soft-X-ray emission below 3 keV is strongly attenuated by absorption. The energy spectrum in this absorption band shows a dramatic change in response to the variation in continuum luminosity. A variable warm absorber appears to be the most likely explanation to account for the spectral change. The absorption-corrected 2–10 keV luminosity is 4×1039 erg s−1 for a source distance of 2.6 Mpc, and at 1 keV is one order of magnitude above previous ROSAT estimates, which affects the appearance of the wide-band spectral energy distribution and photoionization calculations. The rapid X-ray variation is consistent with a black hole of a few times 104 M⊙, as suggested by the optical results and the small bulge of this dwarf galaxy. Such a light black hole is also favoured in order for the Eddington ratio (LBolLEdd) to be above the range of advection-dominated accretion flows, which would clearly fail to explain the observed X-ray variability. The nuclear source of NGC 4395 is therefore consistent with a scaled-down version of higher-luminosity Seyfert nuclei, with an intermediate-mass (104–105 M⊙) black hole, unlike the nearby low-luminosity active galaxies in which underfed massive black holes are suspected to reside.