Ab initio density functional theory calculations are performed to investigate the electronic structure of MoS2 armchair nanoribbons in the presence of an external static electric field. Such nanoribbons, which are nonmagnetic and semiconducting, exhibit a set of weakly interacting edge states whose energy position determines the band gap of the system. We show that, by applying an external transverse electric field, E ext, the nanoribbon band gap can be significantly reduced, leading to a metal–insulator transition beyond a certain critical value. Moreover, the presence of a sufficiently high density of states at the Fermi level in the vicinity of the metal–insulator transition leads to the onset of Stoner ferromagnetism that can be modulated, and even extinguished, by E ext. In the case of bilayer nanoribbons we further show that the band gap can be changed from indirect to direct by applying a transverse field, an effect that might be of significance for opto-electronics applications.