Material stability and dissolution in aqueous media are key issues to address in the development of a new nanomaterial intended for technological application. Dissolution phenomena affect biological and environmental persistence; fate, transport, and biokinetics; device and product stability; and toxicity pathways and mechanisms. This article shows that MoS2 nanosheets are thermodynamically and kinetically unstable to O2-oxidation under ambient conditions in a variety of aqueous media. The oxidation is accompanied by nanosheet degradation and release of soluble molybdenum and sulfur species, and generates protons that can colloidally destabilize the remaining sheets. The oxidation kinetics are pH-dependent, and a kinetic law is developed for use in biokinetic and environmental fate modeling. MoS2 nanosheets fabricated by chemical exfoliation with n-butyl-lithium are a mixture of 1T (primary) and 2H (secondary) phases and oxidize rapidly with a typical half-life of 1-30 days. Ultrasonically exfoliated sheets are in pure 2H phase, and oxidize much more slowly. Cytotoxicity experiments on MoS2 nanosheets and molybdate ion controls reveal the relative roles of the nanosheet and soluble fractions in the biological response. These results indicate that MoS2 nanosheets will not show long-term persistence in living systems and oxic natural waters, with important implications for biomedical applications and environmental risk.