M78 is a bright reflection nebula spanning 4 light years and is located within the Orion B molecular cloud. The Orion B molecular cloud (LDN 1630) is home to several bright nebulae in the same vicinity, the brightest being M78, but also including NGC 2071, NGC 2067, NGC 2064 (all in the image) and NGC 2024, known as the Flame Nebula. The illuminating stars of M78 are early B-type supergiants HDE 38563A and 38563B. The illuminating star for NGC 2071 is HDE 290861. Aside from the brighter stars infrared studies have revealed over 40 low mass stars unseen within the cloak of thick dust pervading the region. Some nascent stars in the M78 region exhibit dramatic Herbig-Haro outflow phenomenon (glowing red patches) indicators of young stellar objects (YSO) still in their formative stages. These infant stars do not shine yet under their own power but reveal their presence by producing collimated jets of hot gas which ionizes the adjacent gas cloud causing a small intensely red glowing patch (seen in the lower left of the image).

A new variable nebula (McNeil's Nebula) was discovered in the vicinity of M78 by Julian W. (Jay) McNeil in February 2004. The fan shaped nebula, visible in the lower left of the image, is a variable nebula illuminated by a young star V1647 Ori located at the apex of the glowing nebula. The phenomenon of variable nebulae is rarely observed but is most likely explained by mass accretion involving a low mass pre-main sequence star which induces transient brightening of the star and subsequent energizing of nearby gas clouds. X-ray observations of the variable star have demonstrated a 50 fold increase in x-ray emission from V1647 Ori believed due to a sudden phase of rapid accretion of mass. The mechanism appears to involve the young stars circumstellar accretion disk which under normal circumstances rotates along with the star. On occasion the rotations of the star and its disk can vary causing instability. Shear forces generated by the differing rotation rates release considerable energy when the system self corrects resulting in the release of energy, brightening the star by as much as 6 magnitudes. Accretion induced brightening of young stars appears to be a short lived phenomenon as McNeil's nebula has been quiescent for 38 years before the most recent outburst.