We report the discovery of the transiting giant planet WASP-17b, the least-dense planet currently known. It is 1.6 Saturn masses, but 1.5-2 Jupiter radii, giving a density of 6%-14% that of Jupiter. WASP-17b is in a 3.7 day orbit around a sub-solar metallicity, V=11.6, F6 star. Preliminary detection of the Rossiter-McLaughlin effect suggests that WASP-17b is in a retrograde orbit ({lambda}~-150{deg}), indicative of a violent history involving planet-planet or star-planet scattering. WASP-17b's bloated radius could be due to tidal heating resulting from recent or ongoing tidal circularization of an eccentric orbit, such as the highly eccentric orbits that typically result from scattering interactions. It will thus be important to determine more precisely the current orbital eccentricity by further high-precision radial velocity measurements or by timing the secondary eclipse, both to reduce the uncertainty on the planet's radius and to test tidal-heating models. Owing to its low surface gravity, WASP-17b's atmosphere has the largest scale height of any known planet, making it a good target for transmission spectroscopy.