Electrons in a simple correlated system behave either as itinerant charge carriers or as localized moments. However, there is growing evidence for the coexistence of itinerant electrons and local moments in transition metals with nearly degenerate $d$-orbitals. It demands one or more selective electron orbitals undergo the Mott transition while the others remain itinerant. Here we report the first observation of such an orbital selective Mott transition (OSMT) in Ca$_{1.8}$Sr$_{0.2}$RuO$_4$ by angle-resolved photoemission spectroscopy (ARPES). While we observed two sets of dispersing bands and Fermi surface associated with the doubly-degenerate $d_{yz}$ and $d_{zx}$ orbitals, the Fermi surface associated with the wider $d_{xy}$ band is missing, a consequence of selective Mott localization. Our theoretical calculations demonstrate that this novel OSMT is mainly driven by the combined effects of interorbital carrier transfer, superlattice potential, and orbital degeneracy, whereas the bandwidth difference plays a less important role.
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