Quantum dots of MoS 2 synthesized via the method of laser ablation show a mixed phase of 2H and 1T polytypes with a lateral size of 2−7 nm. The photoluminescence spectra exhibit prominent dependence on the energy of the incident photon. This observation indicates a distribution of energy bandgap and the presence of differently sized dots. This is also supported by the energy-dependent decay rates. The z-scan technique and optical phase conjugation geometry of degenerate four wave mixing are used to estimate the nonlinear optical parameters. The change in nonlinear optical response of the dots with the pump wavelength is also investigated. The mechanisms of two-photon absorption, electrostriction, free carrier refraction, free carrier absorption, and nonlinear scattering along with the laser-induced thermal effects are found to contribute to the nonlinear response. The effect of the mixed phase and nonzero direct bandgap, achieved via the quantum confinement effect, on the observed nonlinear optical response is discussed. The prepared dots show good optical limiting capabilities, which make them a promising candidate for designing protective coatings for high power lasers.