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 ~19 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 pressure-tuned 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.