Therefore it is a matter of no small moment to believe correctly about what the Law is and what its use and function are. There it is evident that we do not reject the Law and works, as our opponents falsely accuse us. But we do everything to establish the Law, and we require works. We say that the Law is good and useful, but in its proper use, namely, first, as we have said earlier, to restrain civic transgressions; and secondly, to reveal spiritual transgressions. Therefore the Law is a light that illumines and shows, not the grace of God or righteousness and life but the wrath of God, sin, death, our damnation in the sight of God, and hell. For just as on Mt. Sinai the lightning, the thunder, the dark cloud, the smoking and burning mountain, and the whole horrendous sight did not make the Children of Israel happy or alive but terrified them, made them almost helpless, and disclosed a presence of God speaking from the cloud that they could not bear for all their sanctity and purity, so when the Law is being used correctly, it does nothing but reveal sin, work wrath, accuse, terrify, and reduce the minds of men to the point of despair. And that is as far as the Law goes.
On the other hand, the Gospel is a light that illumines hearts and makes them alive. It discloses what grace and the mercy of God are; what the forgiveness of sin, blessing, righteousness, life, and eternal salvation are; and how we are to attain to these. When we distinguish the Law from the Gospel this way, we attribute to each its proper use and function.
Luther’s Works, volume 26 (312-313)