We present results from two Chandra imaging observations of Ross 154, a nearby flaring M dwarf star. During a 61 ks ACIS-S exposure, a very large flare occurred (the equivalent of a solar X3400 event, with LX=1.8×1030 ergs s-1) in which the count rate increased by a factor of over 100. The early phase of the flare shows evidence for the Neupert effect, followed by a further rise and then a two-component exponential decay. A large flare was also observed at the end of a later 48 ks HRC-I observation. Emission from the nonflaring phases of both observations was analyzed for evidence of low-level flaring. From these temporal studies we find that microflaring probably accounts for most of the ``quiescent'' emission and that, unlike for the Sun and the handful of other stars that have been studied, the distribution of flare intensities does not appear to follow a power law with a single index. Analysis of the ACIS spectra, which was complicated by exclusion of the heavily piled-up source core, suggests that the quiescent Ne/O abundance ratio is enhanced by a factor of ~2.5 compared to the commonly adopted solar abundance ratio and that the Ne/O ratio and overall coronal metallicity during the flare appear to be enhanced relative to quiescent abundances. Based on the temperatures and emission measures derived from the spectral fits, we estimate the length scales and plasma densities in the flaring volume and also track the evolution of the flare in color-intensity space. Lastly, we searched for a stellar wind charge exchange X-ray halo around the star but without success; because of the relationship between mass-loss rate and the halo surface brightness, not even an upper limit on the stellar mass-loss rate can be determined.