We report a first measurement of inclusive B -> X_s eta decays, where X_s is a charmless state with unit strangeness. The measurement is based on a pseudo-inclusive reconstruction technique and uses a sample of 657 x 10^6 BB-bar pairs accumulated wit
h the Belle detector at the KEKB e^+e^- collider. For M_{X_s} < 2.6 GeV/c^2, we measure a branching fraction of (26.1 +/- 3.0 (stat) +1.9 -2.1 (syst) +4.0 -7.1 (model)) x 10^-5 and a direct CP asymmetry of A_{CP} = -0.13 +/- 0.04 +0.02 -0.03. Over half of the signal occurs in the range M_{X_s} > 1.8 GeV/c^2.
