We present the first demonstration of a CNOT gate using neutral atoms. Our implementation of the CNOT uses Rydberg blockade interactions between neutral atoms held in optical traps separated by >8 murm m. We measure CNOT fidelities of F=0.73 and 0.72 using two different gate protocols, and show by measurement of parity oscillations that the gate can be used to generate two-atom states with fidelity at the threshold for entanglement. We anticipate that the long range nature of the Rydberg interaction will be attractive for future extensions of this work to multi-qubit systems.