High resolution spectra of the active binary Capella (G8 III + G1 III) covering the energy range 0.4-8.0 keV (1.5-30 Angstroms) show a large number of emission lines, demonstrating the performance of the HETGS. A preliminary application of plasma diagnostics provides information on coronal temperatures and densities. Lines arising from different elements in a range of ionization states indicate that Capella has plasma with a broad range of temperatures, from log T = 6.3 to 7.2, generally consistent with recent results from observations with the Extreme Ultraviolet Explorer (EUVE) and the Advanced Satellite for Cosmology and Astrophysics (ASCA). The electron density is determined from He-like O VII lines, giving the value N_e=10^10 cm^-3 at T_e=2*10^6 K; He-like lines formed at higher temperatures give only upper limits to the electron density. The density and emission measure from O VII lines together indicate that the coronal loops are significantly smaller than the stellar radius.