Observation of the Production of $\eta$ Mesons in Two Photon Collisions

Using 2674 nb/sup -1/ of data taken at ..sqrt..s from 5.00 to 7.25 GeV with a trigger sensitive to decays of lower-mass particles produced in two-photon collisions, we have observed 56 +- 12 events consistent with the reaction e/sup +/e/sup -/..-->..e/sup +/e/sup -/eta, eta..--> gamma gamma... Background has been subtracted using separated-beam data. We obtain GAMMA/sub gammagamma/(eta) = 0.56 +- 0.16 keV and the pseudoscalar-nonet mixing angle theta/sub P/ = -17.6/sup 0/ +- 3.6/sup 0/.