NGC 55 is one of the nearest members of the Sculptor galaxy group which also includes four other bright galaxies, NGC 253, NGC 247, NGC 300, NGC 7793 and a number of dwarf galaxies. The Sculptor group is considered the nearest galaxy group to the Local group. Although a defined group, the Sculptor group is really a loose cloud of galaxies forming a cigar shaped filament some 3 by 20 million light years along our line of sight. The Sculptor group, along with the Canes Venatici complex and the local group appear to form a loose filament of the Virgo supercluster that extends over a distance of 33 million light years. NGC 55 is in a relatively isolated environment and probably has not been disturbed by major merger activity in its recent history.

Confusion still remains regarding its overall morphology. Conclusions about its morphological type have ranged from barred spiral to Magellenic irregular type. Recent consensus suggests it is a magellenic irregular type with its bar seen end on. There is considerable active star formation occurring in NGC 55 particularly in its central region. Large shell structures and plumes have been identified which are signatures of recent supernovae and stellar winds from massive stars. Recent star formation has almost certainly occurred near the center of NGC 55 as recently as 8 million years ago although a fairly steady production of stars has occurred during the last 100 to 200 million years. Compared to other galaxies, NGC 55 has experienced a remarkably uniform star forming history.

NGC 55 is nearby and inclined some 81 degrees so its edge-on disk is favorably oriented for studies of its extraplanar regions and specifically its halo. Several HII regions with embedded clusters of massive stars have been found within the galaxy's halo at distances up to 5000 light years from the galactic plane. Similar HII regions have been observed in the outer halo of other galaxies such as NGC 891, NGC 3628, and NGC 5775 confirming that star formation can indeed occur outside the disk and within the galactic halo. How stars form in the galactic halo, away from traditional regions of star formation remains an enigma. Different scenarios have been proposed including ejection of stars or clusters from the disk as a consequence of supernovae or gravitational encounters, versus de novo star formation in the halo itself. For a number of reasons including the insufficient velocity of runaway stars, the ejection scenario seems unlikely. Evidence points to de novo formation in the halo as the likely origin of these stars. The de novo scenario raises important question such as how did gas reach the halo in a quantity sufficient to make stars? One explanation is that clustered supernovae occurred in the disk during starburst episodes ejecting matter into the halo where it subsequently cooled and collapsed to form molecular clouds.