We present the results of a Chandra observation of the galaxy cluster Abell 689 (z = 0.279). Abell 689 is one of the most luminous clusters detected in the ROSAT All Sky Survey (RASS), but was flagged as possibly including significant point source contamination. The small point spread function of the Chandra telescope allows us to confirm this and separate the point source from the extended cluster X-ray emission. For the cluster, we determine a bolometric luminosity of Lbol= (3.3 ± 0.3) × 1044 erg s−1 and a temperature of kT = 5.1+2.2− 1.3 keV when including a physically motivated background model. We compare our measured luminosity for A689 to that quoted in the RASS, and find L0.1−2.4 keV= 2.8 × 1044 erg s−1, a value ∼10 times lower than the ROSAT measurement. Our analysis of the point source shows evidence for significant pile-up, with a pile-up fraction of ≃60 per cent. Sloan Digital Sky Survey spectra and Hubble Space Telescope (HST) images lead us to the conclusion that the point source within Abell 689 is a BL Lac object. Using radio and optical observations from the Very Large Array and HST archives, we determine αro= 0.50, αox= 0.77 and αrx= 0.58 for the BL Lac, which would classify it as being of ‘high-energy peak BL Lac’ type. Spectra extracted of A689 show a hard X-ray excess at energies above 6 keV that we interpret as inverse-Compton emission from aged electrons that may have been transported into the cluster from the BL Lac.