Analysis results from ASCA and ROSAT observations of the narrow-line Seyfert 1 galaxy Mrk 766 are reported. In the ASCA observation we observed rapid variability with a doubling time scale of 1000 seconds. A spectral variability event was observed in which the spectrum softened and hardened above and below ~1 keV, respectively, as the flux increased. The spectra could be modeled with 5 components: a power law, warm absorber, iron K(alpha) line and soft excess component flux. The spectral variability resulted from a highly significant change in the intrinsic photon law index from Gamma ~1.6 to ~2.0, an increase in the warm absorber ionization, and a marginally significant decrease in the soft component normalization. A ~100 eV equivalent width narrow iron K(alpha) line was detected in the high state spectrum. Spectral hardening during flux increases was observed in three ROSAT observations. The change in intrinsic photon index and disappearance of the soft excess component in the ASCA spectra can be explained as a transition from a first order pair reprocessed spectrum to a pair cascade brought about by a sudden increase in the injected electron Lorentz factor. The change in the ionization of the warm absorber, though model dependent, could correspond to the increase in flux at the oxygen edges resulting from the spectral index change. The ROSAT spectral variability can be interpreted by variable intensity hard power law and a relatively nonvarying soft component possibly primary disk emission. These results are compared with those reported from other narrow-line Seyfert 1 galaxies