Johann Elert Bode discovered M81 in 1774 and the grand design galaxy still carries his name. M81 is the brightest member of the nearby galactic group called the M81 group. This group contains at least 25 other members including the peculiar starburst galaxy M82, the peculiar galaxy NGC 3077 and many dwarfs galaxies. The core galaxies of the group (M81, M82, NGC 3077, NGC 2976) are strongly interacting and are all imbedded within a large and extended molecular gas cloud. The immense cloud shows distinct tidal bridges which appear to connect the three dominant companion galaxies to M81. In particular a distinct bridge of gas exists between M81 and M82 showing velocity characteristics consistent with its origin in a tidal encounter between the two galaxies several hundred million years ago. It is quite probable that several of the dwarf galaxy members of the M81 group were formed recently from condensing tidal debri pulled from the dominant members during major encounters. The Dwarf irregular Holmberg IX (seen above M81 in the image) most likely condensed from tidal debri existing between M81 and M82 in this manner.

It is widely believed that between 300 and 600 million years ago M81 and M82 experienced a violent gravitational interaction that lasted some 100 million years and left its signature on both galaxies. This encounter may have triggered the conditions leading up to the current starburst epoch observed in M82. The two galaxies are locked in an orbit that brings them as close as 10,000 light years during the orbital period of 4.6 billion years. Their current distance from each other is about 120,000 light years. One intriguing scenerio is that M82 may have been a more massive spiral galaxy at one time. After the last close encounter with M81 its disk became stripped of stars and gas leaving its bulge and nuclear disk considerably truncated as it appears today. Its original disk material was then released into a diffuse cloud becoming the tidal tails and filaments seen in the M81-M82 system presently.

M81 has the distinction of being the nearest spiral galaxy to have an active galactic nucleus (AGN). AGN galaxies are luminous galaxies that demonstrate much of their luminosity as nonstellar emission arising from their nucleus. The modern interpretation for the unusual energy output is the presence of a super massive black hole which consumes infalling matter from a rotating accretion disk in the galaxy's center. The matter is converted to energy through a highly efficient process (up to 50% conversion) often resulting in the presence of high energy jets ejected from the nucleus. In the case of M81 the super massive black hole is some 70 million solar masses. M81 has a one sided jet that extends northeast from its core and is a strong radio source. The jet is a compact structure and its length is only 3600 astronomical units. The hot plasma comprising the jet is ejected at relativistic speeds of about ¼ the speed of light. The radio source in M81 is very similar to the central radio source in our galaxy, Sgr A* except that Sgr A* is highly obscured by gas clouds allowing only the crudest investigation of its structure. The jet in the M81 core is compact but relatively unobstructed which has allowed for detailed observations.

In March 1993 the second brightest supernova in modern times occurred in M81. Ten years later a team of astronomers identified for the first time a companion star to the supernova progenitor. This helped identify the 1993 supernova as a type I supernova in which a companion star of a binary system loses mass to a white dwarf which then becomes unstable and explodes. This is in contrast to type II supernovas which occur in solitary massive stars.