We report a measurement of the B-0 -> psi(2S)pi(0) branching fraction based on the full Upsilon(4S) data set of 772 x 10(6) B (B) over bar pairs collected by the Belle detector at the KEKB asymmetric-energy e(+)e(-) collider. We obtain B(B-0 -> psi(2S)pi(0)) = (1.17 +/- 0.17(stat) +/- 0.08(syst)) x 10(-5). The result has a significance of 7.2 standard deviations and is the first observation of the decay B-0 -> psi(2S)pi(0).