Molybdenum disulphide is a layered transition metal dichalcogenide that has recently raised considerable interest due to its unique semiconducting and opto-electronic properties. Although several theoretical studies have suggested an electronic phase transition in molybdenum disulphide, there has been a lack of experimental evidence. Here we report comprehensive studies on the pressure-dependent electronic, vibrational, optical and structural properties of multilayered molybdenum disulphide up to 35 GPa. Our experimental results reveal a structural lattice distortion followed by an electronic transition from a semiconducting to metallic state at B19 GPa, which is confirmed by ab initio calculations. The metallization arises from the overlap of the valance and conduction bands owing to sulphur-sulphur interactions as the interlayer spacing reduces. The electronic transition affords modulation of the opto-electronic gain in molybdenum disulphide. This pressuretuned behaviour can enable the development of novel devices with multiple phenomena involving the strong coupling of the mechanical, electrical and optical properties of layered nanomaterials.