We present the first infrared interferometric observations of a young stell
ar object with a spatial projected resolution better than 2 AU. The observa
tions were obtained with the Palomar Testbed Interferometer (PTI). FU Orion
is exhibits a visibility of V-2 = 0.72 +/- 0.07 for a 103 +/- 5 m-projected
baseline at lambda = 2.2 mu m. On the spatial scale probed by the PTI, the
data are consistent with both a binary system scenario (a maximum magnitud
e difference of 2.7 +/- 0.5 mag and the smallest separation of 0.35 +/- 0.0
5 AU) and a standard luminous accretion disk model ((M)over dot similar to
6 x 10(-5) M. yr(-1)), where the thermal emission dominates the stellar sca
ttering, and are inconsistent with a single stellar photosphere.