We present an occultation of the central X-ray emitting region in the Seyfert Galaxy NGC 1365. This extreme spectral variation (from Compton-thin to reflection-dominated and back to Compton-thin in four days) has been caught in a ten days Chandra monitoring campaign consisting of six short (15 ks) observations performed every two days. We discuss the implications of this occultation within the scenario of a Compton-thick cloud crossing the line of sight of the X-ray source. We estimate a source size R<10^14 cm and a distance of the cloud from the source D<10^16 cm. This direct measurement confirms the theoretical expectations of an extremely compact X-ray source, and shows that the Compton-thick circumnuclear gas is located at a distance from the center on the scale of the Broad Line Region.