We present direct evidence for a reversible phase transition of DNA-linked colloidal gold assemblies. Transmission electron microscopy and optical absorption spectroscopy are used to monitor the colloidal gold phase transition, whose behavior is dominated by DNA interactions. We use single-stranded DNA-capped colloidal gold that is linked by complementary linker DNA to form the assemblies. We found that, compared to free DNA, a sharp melting transition is observed for the DNA-linked colloidal gold assemblies. The structure of the assemblies is non-crystalline, much like a gel phase, consistent with theoretical predictions. Optical spectra and melting curves provide additional evidence of gelation of the colloidal system. The phase transition and separation are examples of percolation in a dilute solvent.