In this paper we establish a one-to-one correspondence between U (1)-gerbes with connections, on the one hand, and their holonomies, for simply-connected manifolds, or their parallel transports, in the general case, on the other hand. This result is a higher-order analogue of the familiar equivalence between bundles with connections and their holonomies for connected manifolds. The holonomy of a gerbe with * presently working as a postdoc at the University of Nottingham, UK 1 group U (1) on a simply-connected manifold M is a group morphism from the thin second homotopy group to U (1), satisfying a smoothness condition, where a homotopy between maps from [0, 1] 2 to M is thin when its derivative is of rank ≤ 2. For the non-simply connected case, holonomy is replaced by a parallel transport functor between two special Lie groupoids, which we call Lie 2-groups. The reconstruction of the gerbe and connection from its holonomy is carried out in detail for the simply-connected case.