We examine the properties of the X-ray gas in the central regions of the distant (z=0.46), X-ray luminous cluster of galaxies surrounding the powerful radio source 3C 295, using observations made with the Chandra Observatory. Between radii of 50 and 500 kpc, the cluster gas is approximately isothermal with an emission-weighted temperature, kT∼5 keV. Within the central 50-kpc radius this value drops to kT∼3.7 keV. The spectral and imaging Chandra data indicate the presence of a cooling flow within the central 50-kpc radius of the cluster, with a mass deposition rate of approximately 280 M⊙ yr−1. We estimate an age for the cooling flow of 1–2 Gyr, which is approximately 1000 times older than the central radio source. We find no evidence in the X-ray spectra or images for significant heating of the X-ray gas by the radio source. We report the detection of an edge-like absorption feature in the spectrum for the central 50-kpc region, which may be caused by oxygen-enriched dust grains. The implied mass in metals seen in absorption could have been accumulated by the cooling flow over its lifetime. Combining the results on the X-ray gas density profile with radio measurements of the Faraday rotation measure in 3C 295, we estimate the magnetic field strength in the region of the cluster core to be B∼12 μG.