  We report the detection of pulsations with $\sim 124$ s period in V2116 Oph,
the optical counterpart of the low-mass X-ray binary GX 1+4. The pulsations are
sinusoidal with modulation amplitude of up to 4% in blue light and were
observed in ten different observing sessions during 1996 April-August using a
CCD photometer at the 1.6-m and 0.6-m telescopes of Laborat\'orio Nacional de
Astrof\'{\i}sica, in Brazil. The pulsations were also observed with the $UBVRI$
fast photometer. With only one exception the observed optical periods are
consistent with those observed by the BATSE instrument on board the Compton
Gamma Ray Observatory at the same epoch. There is a definite correlation
between the observability of pulsations and the optical brightness of the
system: V2116~Oph had $R$ magnitude in the range $15.3-15.5$ when the pulsed
signal was detected, and $R = 16.0-17.7$ when no pulsations were present. The
discovery makes GX 1+4 only the third of $\sim 35$ accretion-powered X-ray
pulsars to be firmly detected as a pulsating source in the optical. The
presence of flickering and pulsations in V2116 Oph adds strong evidence for an
accretion disk scenario in this system. The absolute magnitude of the pulsed
component on 1996 May 27 is estimated to be $M_V \sim -1.5$. The implied
dimensions for the emitting region are $1.1 R_{\sun}$, $3.2 R_{\sun}$, and $7.0
R_{\sun}$, for black-body spectral distributions with $T = 10^5$ K, $2 \times
10^4$ K, and $1 \times 10^4$ K, respectively.
