The challenge is a random number sent from the party which wants to authenticate the other party. The receiver of the challenge includes the challenge in the authentication-information, which is sent back.
The format of a challenge is just a single MPI:
BEGIN
MPI challenge
END
By defining the challenge as an MPI, we get a processor independent integer format. The sender can also freely select the number of bits in the challenge. The challenge should be at least 32 bits, to ensure that the probability of using the same challenge two times in a row is satisfyingly low.