We present new observations of η Carinae, strongly suggesting that it is a binary system. High dispersion measurements of the broad Paγ emission line show periodic radial velocity variations that are nicely explained by a star in a highly eccentric orbit. Velocity characteristics of the system imply massive components, in accord with the luminosity and spectral characteristics. Strong and variable wind-wind interactions are predicted to take place in η Car on the basis of the orbital elements and physical characteristics of the components. The low excitation event predicted for the end of 1997 is underway, confirming the high coherence of the 5.52 year cycle and adding confidence to η Car as a binary system. We associate this event with periastron passage. A conclusive demonstration of the binary orbit is still pending, but the present work has the advantages of bringing this mysterious object within a stellar evolution framework, and, for the first time in its history, predictions suitable for testing against future observations.