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Abstract: The Fano effect, which arises from an interference between a localized state and the continuum, reveals a fundamental aspect of quantum mechanics. We have realized a tunable Fano system in a quantum dot (QD) in an Aharonov-Bohm interferometer, which is the first convincing demonstration of this effect in mesoscopic systems. With the aid of the continuum, the localized state inside the QD acquires itinerancy over the system even in the Coulomb blockade. Through tuning of the parameters, which is an advantage of the present system, unique properties of the Fano effect on the phase and coherence of electrons have been revealed.