Two-dimensional layered materials like MoS2 have shown promise for nanoelectronics and energy storage, both as monolayers and as bulk van der Waals crystals with tunable properties. Here we present a platform to tune the physical and chemical properties of nanoscale MoS2 by electrochemically inserting a foreign species (Li+ ions) into their interlayer spacing. We discover substantial enhancement of light transmission (up to 90% in 4 nm thick lithiated MoS2) and electrical conductivity (more than 200×) in ultrathin (∼2–50 nm) MoS2 nanosheets after Li intercalation due to changes in band structure that reduce absorption upon intercalation and the injection of large amounts of free carriers. We also capture the first in situ optical observations of Li intercalation in MoS2 nanosheets, shedding light on the dynamics of the intercalation process and the associated spatial inhomogeneity and cycling-induced structural defects.