Transition-metal dichalcogenides (TMDCs) such as MoS2 are Earth-abundant catalysts that are attractive for many chemical processes, including the carbon dioxide reduction reaction (CO2RR). While many studies have correlated synthetic preparation and architectures with macroscopic electrocatalytic performance, not much is known about the state of MoS2 under functional conditions, particularly its interactions with target molecules like CO2. Here, we combine operando Mo K- and S K-edge X-ray absorption spectroscopy (XAS) with first-principles simulations to track changes in the electronic structure of MoS2 nanosheets during CO2RR. Comparison of the simulated and measured XAS discerned the existence of Mo-CO2 binding in the active state. This state perturbs hybridized Mo 4d-S 3p states and is critically mediated by sulfur vacancies induced electrochemically. The study sheds new light on the underpinnings of the excellent performance of MoS2 in CO2RR. The electronic signatures we reveal could be a screening criterion toward further gains in activity and selectivity of TMDCs in general.