Materials hosting charge density wave (CDW) may exhibit drastically different properties as compared with their normal states. Among them, 1T tantalum dichalcogenides develop a unique star-of-David CDW and are predicted to be Mott insulators and hosts of quantum spin liquids (QSL). 1T-TaSe₂ is a promising material platform in this family with a robust CDW order and a much cleaner phase diagram, despite the observed metallic behavior in the bulk. Recent results have showed interlayer interactions and stacking order may obfuscate the physics and mask out the strong correlation in the system. On the other hand, advances in layered van der Waals materials provides direct access to individual layer properties and therefore make the “bottom-up” study of complicated systems possible. With TaSe₂ devices down to bilayer thickness, we observed a crossover from metallic properties in the bulk to correlated insulating properties in the atomically thin 1T-TaSe₂ due to the suppression of the hybridization between Ta 5d_z² orbitals and Se 4p_z orbitals with transport and tunneling measurements. We further investigated the magnetic ground state of monolayer 1T-TaSe₂ with thermally induced 1T/1H heterostructures. The existence of localized magnetic moments was confirmed, and we established the system as a promising quantum spin liquid candidate.