A classic reflection nebula, IC 2118 lies 2 degrees northwest of the bright Class B supergiant Rigel which is thought to be the source of illumination for the nebula. The distance to IC2118 has been reported to be 210 pc's based on its proximity to Rigel. Radio observations show substantial carbon monoxide emission throughout parts of IC 2118 an indicator of the presence of molecular clouds and star formation in the nebula. In fact candidates for pre-main sequence stars and some classic T-Tauri stars have been found deep within the nebula. The molecular clouds of IC 2118 are probably juxtaposed to the outer boundaries of the vast Orion-Eridanus bubble, a giant supershell of molecular hydrogen blown by the high mass stars of the Orion OB1 association. As the supershell expands into the interstellar medium favorable circumstances for star formation occur. IC 2118 is located in one such area.

The wind blown appearance and cometary shape of the bright reflection nebula is highly suggestive of a strong association with the high mass luminous stars of Orion OB1. The fact that the heads of the cometary clouds of IC2118 point northeast towards the association is strong support of that relationship.