It is well known that the spectral solutions of conservation laws have the attractive distinguishing property of infinite-order convergence (also called spectral accuracy) when they are smooth (e.g., [C. Canuto, M.Y. Hussaini, A. Quarteroni, T.A. Zang, Spectral Methods for Fluid Dynamics, Springer-Verlag, Heidelberg, 1988; J.P. Boyd, Chebyshev and Fourier Spectral Methods, second ed., Dover, New York, 2001; C. Canuto, M.Y. Hussaini, A. Quarteroni, T.A. Zang, Spectral Methods: Fundamentals in Single Domains, Springer-Verlag, Berlin Heidelberg, 2006]). If a discontinuity or a shock is present in the solution, this advantage is lost. There have been attempts to recover exponential convergence in such cases with rather limited success. The aim of this paper is to propose a discontinuous spectral element method coupled with a level set procedure, which tracks discontinuities in the solution of nonlinear hyperbolic conservation laws with spectral convergence in space. Spectral convergence is demonstrated in the case of the inviscid Burgers equation and the one-dimensional Euler equations.