The development of optical gain in chemically synthesized semiconductor nanoparticles (nanocrystal quantum dots) has been intensely studied as the first step toward nanocrystal quantum dot lasers. We examined the competing dynamical processes involved in optical amplification and lasing in nanocrystal quantum dots and found that, despite a highly efficient intrinsic nonradiative Auger recombination, large optical gain can be developed at the wavelength of the emitting transition for close-packed solids of these dots. Narrowband stimulated emission with a pronounced gain threshold at wavelengths tunable with the size of the nanocrystal was observed, as expected from quantum confinement effects. These results unambiguously demonstrate the feasibility of nanocrystal quantum dot lasers.