The cooling flow cluster Hydra A was observed during the orbital activation and calibration phase of the Chandra Observatory. While the X-ray image of the cluster exhibits complex structure in the central region as reported in McNamara et al., the large-scale X-ray morphology of the cluster is fairly smooth. A spectroscopic analysis of the ACIS data shows that the gas temperature in Hydra A increases outward, reaches a maximum temperature of 4 keV at 200 kpc, and then decreases slightly at larger radii. The distribution of heavy elements is nonuniform, with a factor of 2 increase in the Fe and Si abundances within the central 100 kpc. Beyond the central 100 kpc the Si-to-Fe abundance ratio is twice solar, while the Si-to-Fe ratio of the central excess is consistent with the solar value. One of the more surprising results is the lack of spectroscopic evidence for multiphase gas within the bulk of the cooling flow. Beyond the central 30 kpc, the ACIS spectra are adequately fitted with a single-temperature model. The addition of a cooling flow component does not significantly improve the fit. Only within the central 30 kpc (where the cooling time is less than 1 Gyr) is there spectroscopic evidence for multiphase gas. However, the spectroscopic mass deposition rate is more than a factor of 10 less than the morphologically derived mass accretion rate at 30 kpc. We propose that the cooling flow region is convectively unstable owing to heating by the central radio source, which significantly reduces the net accretion rate. In addition, we show that the mass distribution within the central 30–200 kpc region scales as ρd ∝ r-1.3, intermediate between an NFW and a Moore profile, but with a best-fit NFW concentration parameter (cNFW = 12) approximately 3 times greater than that found in numerical simulations. However, given the limited photon statistics, we cannot rule out the presence of a flat-density core with a core radius less than 30 kpc.