This paper investigates the optical and near-infrared properties of galaxies in the local Universe using data from the Two Micron All Sky Survey (2MASS) and the Sloan Digital Sky Survey (SDSS). The authors calculate galaxy luminosity and stellar mass functions, estimating corrections for passband shifting and galaxy evolution, and present-day stellar mass-to-light (M/L) ratios by fitting optical-near-infrared galaxy data with simple models. They find that the optical and near-infrared luminosity functions agree with recent literature determinations within uncertainties, and that 2MASS is biased against low surface brightness galaxies. They estimate the 'true' K-band luminosity function, which has a steeper faint end slope and a slightly higher overall luminosity density compared to direct estimates. Assuming a universally-applicable stellar initial mass function (IMF), they find good agreement between the stellar mass function derived from 2MASS/SDSS data and that derived by Cole et al. (2001). The stellar mass function has a steeper faint end slope than −1.1, reflecting the low M/L ratios characteristic of low-mass galaxies. They estimate an upper limit to the stellar mass density in the local Universe and discuss the type dependence in the optical and near-infrared luminosity functions and the stellar mass function, finding that early-type galaxies have larger characteristic luminosities and steeper faint end slopes than late-type galaxies.This paper investigates the optical and near-infrared properties of galaxies in the local Universe using data from the Two Micron All Sky Survey (2MASS) and the Sloan Digital Sky Survey (SDSS). The authors calculate galaxy luminosity and stellar mass functions, estimating corrections for passband shifting and galaxy evolution, and present-day stellar mass-to-light (M/L) ratios by fitting optical-near-infrared galaxy data with simple models. They find that the optical and near-infrared luminosity functions agree with recent literature determinations within uncertainties, and that 2MASS is biased against low surface brightness galaxies. They estimate the 'true' K-band luminosity function, which has a steeper faint end slope and a slightly higher overall luminosity density compared to direct estimates. Assuming a universally-applicable stellar initial mass function (IMF), they find good agreement between the stellar mass function derived from 2MASS/SDSS data and that derived by Cole et al. (2001). The stellar mass function has a steeper faint end slope than −1.1, reflecting the low M/L ratios characteristic of low-mass galaxies. They estimate an upper limit to the stellar mass density in the local Universe and discuss the type dependence in the optical and near-infrared luminosity functions and the stellar mass function, finding that early-type galaxies have larger characteristic luminosities and steeper faint end slopes than late-type galaxies.