Optical spectra were obtained of the optical counterpart of the high latitude ( b \simeq 62 \arcdeg ) soft X-ray transient XTE J1118+480 near its quiescent state ( R \simeq 18.3 ) with the new 6.5 m MMT and the 4.2 m WHT . The spectrum exhibits broad , double-peaked , emission lines of hydrogen ( FWHM \simeq 2400 km s ^ { -1 } ) arising from an accretion disk superposed with absorption lines of a late-type secondary star . Cross-correlation of the 27 individual spectra with late-type stellar template spectra reveals a sinusoidal variation in radial velocity with amplitude K = 701 \pm 10 { km s } ^ { -1 } and orbital period P = 0.169930 \pm 0.000004 d. The mass function , 6.1 \pm 0.3 { M } _ { \odot } , is a firm lower limit on the mass of the compact object and strongly implies that it is a black hole . We estimate the spectral type of the secondary to be K7V–M0V and that it contributes 28 \pm 2 \% of the light in the 5800-6400 Å region on 2000 November 20 increasing to 36 \pm 2 \% by 2001 January 4 as the disk fades . Photometric observations ( R -band ) with the IAC 0.8 m telescope reveal ellipsoidal light variations of full amplitude 0.2 mag . Modeling of the light curve gives a large mass ratio ( \frac { M _ { 1 } } { M _ { 2 } } \sim 20 ) and a high orbital inclination ( i = 81 \arcdeg \pm 2 \arcdeg ) . Our combined fits yield a mass of the black hole in the range M _ { 1 } = 6.0 - 7.7 ~ { } { M } _ { \odot } ( 90 % confidence ) for plausible secondary star masses of M _ { 2 } = 0.09 - 0.5 ~ { } { M } _ { \odot } . The photometric period measured during the outburst is 0.5 % longer than our orbital period and probably reflects superhump modulations as observed in some other soft X-ray transients . The estimated distance is d = 1.9 \pm 0.4 kpc corresponding to a height of 1.7 \pm 0.4 kpc above the Galactic plane . The spectroscopic , photometric , and dynamical results indicate that XTE J1118+480 is the first firmly identified black hole X-ray system in the Galactic halo .