From e+e- collision data acquired with the CLEO detector at CESR, we observe the non-D Dbar decay psi(3770)->gamma chi_c1 with a statistical significance of 6.6 standard deviations, using the two-photon cascades to J/psi and J/psi->l+l-. We determine sigma(e+e- -> psi(3770)) x BR(psi(3770)->gamma chi_c1) =(18.0 pm3.3 pm2.5) pb and branching fraction BR(psi(3770)->gamma chi_c1)=(2.8+-0.5+-0.4) x 10^-3. We set 90% C.L. upper limits for the transition to chi_c2 (chi_c0) : sigma x BR < 5.7 pb (< 282 pb) and BR < 0.9 x 10^-3 (<44 x 10^-3). We also determine Gamma(psi(3770)->gamma chi_c1)/Gamma(psi(3770)->pi+pi-J/psi) =1.5+-0.3+-0.3 (>1.0 at 90 % C.L.), which bears upon the interpretation of X(3872).