We demonstrate for the first time that impact ionization (II) (the inverse of Auger recombination) occurs with very high efficiency in semiconductor nanocrystals (NCs). Interband optical excitation of PbSe NCs at low pump intensities, for which less than one exciton is initially generated per NC on average, results in the formation of two or more excitons (carrier multiplication) when pump photon energies are more than 3 times the NC band gap energy. The generation of multiexcitons from a single photon absorption event is observed to take place on an ultrafast (picosecond) time scale and occurs with up to 100% efficiency depending upon the excess energy of the absorbed photon. Efficient II in NCs can be used to considerably increase the power conversion efficiency of NC-based solar cells.