We have combined 2MASS and POSS II data in a search for nearby ultracool (later than M6.5) dwarfs with K_s<12. Spectroscopic follow-up observations identify 53 M7 to M9.5 dwarfs and seven L dwarfs. The observed space density is 0.0045 +- 0.0008 M8-M9.5 dwarfs per cubic parsec, without accounting for biases, consistent with a mass function that is smooth across the stellar/substellar limit. We show the observed frequency of H alpha emission peaks at ~100% for M7 dwarfs and then decreases for cooler dwarfs. In absolute terms, however, as measured by the ratio of H alpha to bolometric luminosity, none of the ultracool M dwarfs can be considered very active compared to earlier M dwarfs, and we show that the decrease that begins at spectral type M6 continues to the latest L dwarfs. We find that flaring is common among the coolest M dwarfs and estimate the frequency of flares at 7% or higher. We show that the kinematics of relatively active (EW_{H alpha}>6 Angstroms) ultracool M dwarfs are consistent with an ordinary old disk stellar population, while the kinematics of inactive ultracool M dwarfs are more typical of a 0.5 Gyr old population. The early L dwarfs in the sample have kinematics consistent with old ages, suggesting that the hydrogen burning limit is near spectral types L2-L4. We use the available data on M and L dwarfs to show that chromospheric activity drops with decreasing mass and temperature, and that at a given (M8 or later) spectral type, the younger field (brown) dwarfs are less active than many of the older, more massive field stellar dwarfs. Thus, contrary to the well-known stellar age-activity relationship, low activity in field ultracool dwarfs can be an indication of comparative youth and substellar mass.
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