A phase transition indicates a sudden change in the properties of a large system. For temperature-driven phase transitions this is related to nonanalytic behavior of the free energy density at the critical temperature: The knowledge of the free energy density in one phase is insufficient to predict the properties of the other phase. In this Letter we show that a close analogue of this behavior can occur in the real time evolution of quantum systems, namely nonanalytic behavior at a critical time. We denote such behavior a dynamical phase transition and explore its properties in the transverse-field Ising model. Specifically, we show that the equilibrium quantum phase transition and the dynamical phase transition in this model are intimately related.