© 2016 American Physical Society. We report the first observation of the decay Λc+→pK+π- using a 980 fb-1 data sample collected by the Belle detector at the KEKB asymmetric-energy e+e- collider. This is the first observation of a doubly Cabibbo-suppressed decay of a charmed baryon. We measure the branching ratio of this decay with respect to its Cabibbo-favored counterpart to be B(Λc+→pK+π-)/B(Λc+→pK-π+)=(2.35±0.27±0.21)×10-3, where the uncertainties are statistical and systematic, respectively.