We present Cassini observations of a plasma vortex in Saturn's dayside outer magnetosphere. The vortex encounter took place on 13 December 2004 as Cassini was travelling toward the planet. The spacecraft crossed the magnetopause 3 times, before being immersed in the low-latitude boundary layer. During the transition between the boundary layer and the magnetosphere proper, the spacecraft observed deflected boundary layer plasma, a twisted magnetic field topology, and high-energy (>20 keV) directional electron fluxes. These observations are consistent with an encounter with a vortex on the inner edge of the boundary layer, an interface that is expected to be susceptible to the growth of the Kelvin-Helmholtz (K-H) instability due to its low magnetic shear. The size of the vortex is determined to be at least 0.55 RS, and a simple model of the current system resulting from the formation of the vortex is proposed. The possible acceleration mechanisms responsible for the high-energy electrons are discussed. The identification of the structure provides compelling evidence of the operation of the nonlinear K-H instability at Saturn's morning magnetospheric boundaries and has implications for our understanding of the transfer of energy and momentum between the solar wind and Saturn's magnetosphere.