We report the observation of $\e^+e^-\to \phi\eta$ near $\sqrt{s}$ = 10.58 GeV with 6.5 $\sigma$ significance in the $K^+K^-\gamma\gamma$ final state in a data sample of 224 $fb^{-1}$ collected by the BaBar experiment at the PEP-II $e^+e^-$ storage rings. We measure the restricted radiation-corrected cross section to be $\sigma(\e^+e^- \to \phi \eta) =$$2.1\pm 0.4 (\mathrm{stat})\pm 0.1(\mathrm{syst}) \mathrm{fb}$ within the range $|\cos\theta^*| < 0.8$, where $\theta^*$ is the center-of-mass polar angle of the $\phi$ meson. The $\phi$ meson is required to be in the invariant mass range of 1.008 $< m_{\phi} <$ 1.035 \gevcc. The radiation-corrected cross section in the full $\cos\theta^*$ range is extrapolated to be $2.9\pm 0.5 (\mathrm{stat})\pm 0.1(\mathrm{syst}) \mathrm{fb}$.
Radiation corrected cross section in the limited cos(theta) range and extrapolated to the full range assuming a 1+ cos(theta)**2 dependence.
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