We report the discovery of star formation activity in perhaps the most distant molecular cloud in the extreme outer galaxy. We performed deep near infrared imaging with the Subaru 8.2 m telescope, and found two young embedded clusters at two CO peaks of Digel Cloud 1 at the kinematic distance of D = 16 kpc (Galactocentric radius RG = 22 kpc). We identified 18 and 45 cluster members in the two peaks, and the estimated stellar density are ~ 5 and ~ 3 pc^-2, respectively. The observed K-band luminosity function suggests that the age of the clusters is less than 1 Myr and also the distance to the clusters is consistent with the kinematic distance. On the sky, Cloud 1 is located very close to the H I peak of high-velocity cloud (HVC) Complex H, and there are some H I intermediate velocity structures between the Complex H and the Galactic disk, which could indicate an interaction between them. We suggest possibility that Complex H impacting on the Galactic disk has triggered star formation in Cloud 1 as well as the formation of Cloud 1 molecular cloud.