We report the discovery of a transient source in the central regions of galaxy cluster A267. The object, which we call "PALS-1," was found in a survey aimed at identifying highly magnified Lyman break galaxies in the fields of intervening rich clusters. At discovery, the source had Un > 24.7 (2 σ; AB), g = 21.96 ± 0.12, and very blue g - r and r - i colors; i.e., PALS-1 was a "U-band dropout," characteristic of star-forming galaxies and quasars at z ∼3. However, 3 months later the source had faded by more than 3 mag. Further observations showed a continued decline in luminosity, to R > 26 A at 7 months after discovery. Although the apparent brightness suggests a supernova at roughly the cluster redshift, we show that the photometry and light curve argue against any known type of supernova at any redshift. The spectral energy distribution and location near the center of a galaxy cluster are consistent with the hypothesis that PALS-1 is a gravitationally lensed transient at z ≈ 3.3. If this interpretation is correct, the source is magnified by a factor of 4-7, and two counterimages are predicted. Our lens model predicts that there are time delays between the three images of 1-10 yr and that we have witnessed the final occurrence of the transient. The intense luminosity (MAB ∼-23.5 after correcting for lensing) and blue UV continuum (implying T ≳ 50,000 K) argue that the source may have been a flare resulting from the tidal disruption of a star by a 106-108 M· black hole. Regardless of its physical nature, PALS-1 highlights the importance of monitoring regions of high magnification in galaxy clusters for distant time-varying phenomena.