The Wolf-Rayet Star HD 197406, with Its Strongly Ionizing Close Companion

High-quality, phase-dependent CCD spectra are presented for the first time for this unusual Population I, runaway WN7 single-line binary system. Besides confirming a previous orbit based on the N iv 4058 Å emission line, these spectroscopic data show phase-dependent, line-profile variations, especially in He II. The low mass function, but normal orbital inclination, implies that the companion is either a normal B2-B4 V-III star or a relativistic object. In either case, the phase-dependent line variations lead to the suggestion of an ionized cavity near the companion that is probably created from X-rays generated via impact of the W-R wind on the windless B star, or via accretion on the relativistic companion. This is borne out in the light curve, based on new data combined with all previously published data, which shows a broad minimum when the W-R component is closest to the observer. Compared to all other light curves known for W-R + OB systems, HD 197406's light curve requires the secondary light to arise in an extended region, presumably the hot cavity. Some preference is shown for the scenario involving a relativistic companion, from timing arguments of the orbiting ionized cavity. Despite the strong ionization, its local nature ensures that HD 197406 remains only a weak observed X-ray source.