We present VI CCD color-magnitude diagrams for the globular cluster
M54 and the Sagittarius dwarf galaxy. These are used to derive the
following quantities: (Fe/H) = -1.79 +/- 0.08 for M54and (Fe/H) = 0.52
+/- 0.09 for Sagittarius. We find a metallicity dispersio of +/- 0.16
dex in M54, and we infer the possible existence of a (Fe/H)
approximately -1.3 component in Sagittarius, which may have a
metallicity dispersion as well. The mean reddening in the direction of
M54 is E(B-V) = 0.13 +/- 0.02.  The distances to M54 and Sagittarius,
determined using their horizontal branch magnitudes, are identical to
within the uncertainties of existing RR Lyrae luminosity-abundance
relations. This, together with positional and radial velocity
arguments, suggests the M54 is physically associated with
Sagittarius. We note that M54 is substantially brighter than the
globular cluster members of the Fornax dwarf spheroidal galaxy, and
that the metal abundance of Sagittarius is quite high for its
estimated absolute magnitude.