In the past 20 years, researchers studying nanomaterials have uncovered many new and interesting properties not found in bulk materials. Extensive research has focused on metal nanoparticles (>3 nm) because of their potential applications, such as in molecular electronics, image markers, and catalysts. In particular, the discovery of metal nanoclusters (<3 nm) has greatly expanded the horizon of nanomaterial research. These nanosystems exhibit molecular-like characteristics as their size approaches the Fermi-wavelength of an electron. The relationships between size and physical properties for nanomaterials are intriguing, because for metal nanosystems in this size regime both size and shape determine electronic properties. Remarkably, changes in the optical properties of nanomaterials have provided tremendous insight into the electronic structure of nanoclusters. The success of synthesizing monolayer protected clusters (MPCs) in the condensed phase has allowed scientists to probe the metal core directly. Au MPCs have become the "gold" standard in nanocluster science, thanks to the rigorous structural characterization already accomplished. The use of ultrafast laser spectroscopy on MPCs in solution provides the benefit of directly studying the chemical dynamics of metal nanoclusters (core), and their nonlinear optical properties. In this Account, we investigate the optical properties of MPCs in the visible region using ultrafast spectroscopy. Based on fluorescence up-conversion spectroscopy, we propose an emission mechanism for these nanoclusters. These clusters behave differently from nanoparticles in terms of emission lifetimes as well as two-photon cross sections. Through further investigation of the transient (excited state) absorption, we have found many unique phenomena of nanoclusters, such as quantum confinement effects and vibrational breathing modes. In summary, based on the differences in the optical properties, the distinction between nanoclusters and nanoparticles appears at a size near 2.2 nm. This is consistent with simulations from a free-electron model proposed for MPCs. The use of ultrafast techniques on these nanoclusters can answer many of the fundamental questions about the nature of these exciting nanomaterials and their applications.