We report the observation of e+e-→η near s=10.58GeV with 6.5σ significance in the K+K-γγ final state in a data sample of 224fb-1 collected by the BABAR experiment at the PEP-II e+e- storage rings. We measure the restricted radiation-corrected cross section to be σ(e+e-→η)=2.1±0.4(stat)±0.1(syst)fb within the range |cosθ*|<0.8, where θ* is the center-of-mass polar angle of the meson. The meson is required to be in the invariant mass range of 1.008<m<1.035GeV/c2. The radiation-corrected cross section in the full cosθ* range is extrapolated to be 2.9±0.5(stat) ±0.1(syst)fb. © 2006 The American Physical Society.