The correlation of electronic structure and magnetic behaviors of layered molybdenum disulfide (MoS2) nanosheets, mechanically exfoliated from pristine hexagonal crystal (2H-MoS2) have been studied. Raman spectra show the energy difference (ΔE) between two Raman peaks A1g and was about 20.2 cm−1, indicating the formation of mono-/bi-layered MoS2 nanosheets as obtained after mechanical exfoliation from pristine 2H-MoS2. The absence of the reflection peak (0 0 2) in x-ray diffraction patterns confirms the formation of few-layered and mono-/bi-layered MoS2 nanosheets with reduced thickness. Mo 3d and S 2p XPS core level peaks shifted to higher energy with the reduction of the number of layers in exfoliated MoS2. As the number of layers decreased, valence band maximum position increased from 1.11 eV (pristine MoS2) to 1.57 eV (mono-/bi-layered MoS2 nanosheets), whereas the surface work function (Ф) reduced from 4.85 eV (pristine MoS2) to 4.47 eV (mono-/bi-layered MoS2 nanosheets), as observed from UPS (He-I) measurements. UPS (He-II) spectra, as well as VB-PES spectra of mono-/bi-layered MoS2 nanosheets, exhibits an enhanced valence band density of states (DOS) of S 3p —derived states near Fermi level (Ef). Mo LII-edge and S K-edge x-ray absorption near edge structure spectra of mono-/bi-layered MoS2 nanosheets show the splitting of different peaks that cause a noticeable change in their band structure. Magnetic M–H hysteresis loops measurement clearly demonstrates the increase of room temperature ferromagnetism from pristine to mono-/bi-layer MoS2, due to the existence of defects (‘S’-vacancies or defects at the grain boundaries region) and the increase of DOS.