The sdB star KPD 0422+5421 was discovered to be a single-lined spectroscopic binary with a period of P=0.0901795 +/- (3times 10^{-7}) days (2 hours, 10 minutes). The U and B light curves display an ellipsoidal modulation with amplitudes of about 0.02 magnitudes. The sdB star contributes nearly all of the observed flux. This and the absence of any reflection effect suggest that the unseen companion star is small (i.e. R_comp ~ 0.01 solar radii) and therefore degenerate. We modeled the U and B light curves and derived i = 78.05 +/- 0.50 degrees and a mass ratio of q = M_comp/M_sdB = 0.87 +/- 0.15. The sdB star fills 69% of its Roche lobe. These quantities may be combined with the mass function of the companion (f(M) = 0.126 +/- 0.028 solar masses) to derive M_sdB = 0.72 +/- 0.26 solar masses and M_comp = 0.62 +/- 0.18 solar masses. We used model spectra to derive the effective temperature, surface gravity, and helium abundance of the sdB star. We found T_eff = 25,000 +/- 1500K, log g = 5.4 +/- 0.1, and [He/H] = -1.0. With a period of 2 hours and 10 minutes, KPD 0422+5421 has one of the shortest known orbital periods of a detached binary. This system is also one of only a few known binaries which contain a subdwarf B star and a white dwarf. Thus KPD 0422+5421 represents a relatively unobserved, and short-lived, stage of binary star evolution.