We investigate the unresolved X-ray emission originating from the bulge of M 31. We show that a part of this emission is due to a large number of faint sources – mainly accreting white dwarfs and active binaries, associated with the old stellar population, similar to the Galactic ridge X-ray emission of the Milky Way. We also detect soft X-ray emission from ionized gas. It has a temperature of about ∼300 eV and total mass of ∼2 × 106Msun. The gas distribution is extended along the minor axis of the galaxy suggesting that it may be outflowing in the direction perpendicular to the disk of M 31. The outflow can be maintained from the mass and energy supply from evolved stars and type Ia supernovae respectively.