The electronic properties of ultrathin crystals of molybdenum disulfide consisting of N = 1, 2, ... 6 S-Mo-S monolayers have been investigated by optical spectroscopy. Through characterization by absorption, photoluminescence, and photoconductivity spectroscopy, we trace the effect of quantum confinement on the material's electronic structure. With decreasing thickness, the indirect band gap, which lies below the direct gap in the bulk material, shifts upwards in energy by more than 0.6 eV. This leads to a crossover to a direct-gap material in the limit of the single monolayer. Unlike the bulk material, the MoS2 monolayer emits light strongly. The freestanding monolayer exhibits an increase in luminescence quantum efficiency by more than a factor of 1000 compared with the bulk material.