Models that seek to unify BL Lacs and low-power radio galaxies predict that
the two types of object should show similar isotropically emitted X-ray em
ission. Testing this is usually limited by difficulties in separating stron
g X-ray emission from a BL Lac nucleus and surrounding low surface-brightne
ss emission. In this paper we report ROSAT HRI observations of the z = 0.05
5 BL Lac object PKS 0521-365. We are able to separate a luminous extended X
-ray component from the bright nucleus. Using a new radio map, we show that
it is unlikely that the extended emission is due to inverse Compton scatte
ring of photons from the active nucleus, and instead interpret it as therma
l emission from dense, rapidly cooling gas. This is a more extreme environm
ent than is found in typical FR I radio galaxies, and may pose a problem fo
r unified models.