While the classical, wavelike behavior of light (interference and diffraction) has been easily observed in undergraduate laboratories for many years, explicit observation of the quantum nature of light (i.e., photons) is much more difficult. For example, while well-known phenomena such as the photoelectric effect and Compton scattering strongly suggest the existence of photons, they are not definitive proof of their existence. Here we present an experiment, suitable for an undergraduate laboratory, that unequivocally demonstrates the quantum nature of light. Spontaneously downconverted light is incident on a beamsplitter and the outputs are monitored with single-photon counting detectors. We observe a near absence of coincidence counts between the two detectors—a result inconsistent with a classical wave model of light, but consistent with a quantum description in which individual photons are incident on the beamsplitter. More explicitly, we measured the degree of second-order coherence between the outputs to be g(2)(0)=0.0177±0.0026,g(2)(0)=0.0177±0.0026, which violates the classical inequality g(2)(0)⩾1g(2)(0)⩾1 by 377 standard deviations.