  We use a large sample of galaxies from the Two Micron All Sky Survey (2MASS)
and the Sloan Digital Sky Survey (SDSS) to calculate galaxy luminosity and
stellar mass functions in the local Universe. We estimate k-corrections,
evolution corrections, and stellar mass-to-light ratios (M/Ls) by fitting the
galaxy colors with simple models. Our optical and near-infrared luminosity
functions agree with most recent literature optical and near-infrared
determinations within the uncertainties. We argue that 2MASS is biased against
low surface brightness galaxies, and use SDSS plus our knowledge of stellar
populations to estimate that the true K-band luminosity function has a steeper
faint end slope than the direct estimate. Assuming a universally-applicable
stellar initial mass function (IMF), we derive the stellar mass function of
galaxies. The faint end slope slope for the stellar mass function is steeper
than -1.1, reflecting the low stellar M/Ls characteristic of low-mass galaxies.
We estimate an upper limit to the stellar mass density in the local Universe
Omega* h = 0.0020+/-0.0006 by assuming an IMF as rich in low-mass stars as
allowed by observations of galaxy dynamics. Finally, we find that the
characteristic luminosity or mass of early-type galaxies is larger than for
later types, and the faint end slope is steeper for later types than for
earlier types. Accounting for typing uncertainties, we estimate that at least
half, and perhaps as much as 3/4, of the stellar mass in the Universe is in
early-type galaxies. We present also SDSS/2MASS color-M/L correlations, an
updated discussion of near-infrared stellar M/L estimates, and the
volume-corrected distribution of g and K-band stellar M/Ls as a function of
stellar mass. [Abridged]
