We have investigated the effect of potassium (K) intercalation on $2H$-MoS$_2$ using transmission electron energy-loss spectroscopy. For K concentrations up to approximately 0.4, the crystals appear to be inhomogeneous with a mix of structural phases and irregular potassium distribution. Above this intercalation level, MoS$_2$ exhibits a $2a times 2a$ superstructure in the $ab$ plane and unit cell parameters of a = 3.20 $unicode{x212B}$ and c = 8.23 $unicode{x212B}$ indicating a conversion from the $2H$ to the $1T$ or $1T$ polytypes. The diffraction patterns also show a $sqrt{3}a times sqrt{3}a$ and a much weaker $2sqrt{3}a times 2sqrt{3}a$ superstructure that is very likely associated with the ordering of the potassium ions. A semiconductor-to-metal transition occurs signified by the disappearance of the excitonic features from the electron energy-loss spectra and the emergence of a charge carrier plasmon with an unscreened plasmon frequency of 2.78 eV. The plasmon has a positive, quadratic dispersion and appears to be superimposed with an excitation arising from interband transitions. The behavior of the plasmon peak energy positions as a function of potassium concentration shows that potassium stoichiometries of less than $sim 0.3$ are thermodynamically unstable while higher stoichiometries up to $sim 0.5$ are thermodynamically stable. Potassium concentrations greater than $sim 0.5$ lead to the decomposition of MoS$_2$ and the formation of K$_2$S. The real part of the dielectric function and the optical conductivity of K$_{0.41}$MoS$_2$ were derived from the loss spectra via Kramers-Kronig analysis.