The chemistry, optical properties, and femtosecond electron dynamics of gold nanoshells are described. The gold nanoshells consist of Au-coated Au\sb2S nanoparticles prepared via aqueous phase chemistry using HAuCl\sb4 and Na\sb2S. During the course of the reaction, the plasmon-related absorption peak first shifts from $\sim$650 nm out to $\sim$900 nm, then shifts back to $\sim650nm.Itisshown,usinggeneralizedMiescatteringtheory,thatthisplasmonpeakshiftisdeterminedbytherelativethicknessoftheAushellandtheAu\sb2$S core diameter. This understanding of the optical properties of these nanoparticles is used to elucidate the nanoparticle growth kinetics. The dynamics of the electrons in the Au shell are studied with femtosecond pump-probe spectroscopy using a cavity-dumped Ti:sapphire laser. The induced change in the transmission of the gold nanoshell films studied has a lifetime of $\sim$1.6 ps. The origin of the measured signal is shown to be due to the creation of a hot electron distribution that returns to equilibrium via electron-dissipative interactions with the nanoparticle core and the embedding medium.