The nature of the defect responsible for room-temperature ferromagnetism in Co-doped anatase TiO2 has remained elusive. Here we report atomic-resolution Z-contrast images of epitaxially grown Co0.03:TiO2 films showing that Co atoms are dispersed and occupy preferred interstitial sites. Density-functional calculations found that these sites are the lowest-energy configuration of Co in anatase and that O vacancies (VO), introduced by annealing, anchor the Co atoms into Co-Ti+3-VO complexes. The calculated magnetic moment is in agreement with our measured value and the calculated Co x-ray absorption spectrum is in agreement with data published in the literature.