Antiferroquadrupolar (AFQ) ordering has been conjectured in several rare-earth compounds to explain their anomalous magnetic properties. No direct evidence for AFQ ordering, however, has been reported. Using the resonant x-ray scattering technique near the Dy L(III) absorption edge, we have succeeded in observing the AFQ order parameter in DyB2C2 and analyzing the energy and polarization dependence. The much weaker coupling between the orbital degrees of freedom and the lattice in 4f electron systems than in 3d compounds makes them an ideal platform to study orbital interactions originating from electronic mechanisms.