The galaxy was discovered by Caroline Herschel in 1783 during one of her systematic comet searches. About half a century later, John Herschel observed it using his 18-inch metallic mirror reflector at the Cape of Good Hope. He wrote: "very bright and large (24′ in length); a superb object.... Its light is somewhat streaky, but I see no stars in it except 4 large and one very small one, and these seem not to belong to it, there being many near..."

The Sculptor Galaxy is located at the center of the Sculptor Group, one of the nearest groups of galaxies to the Milky Way. The Sculptor Galaxy (the brightest galaxy in the group and one of the intrinsically brightest galaxies in the vicinity of ours, only surpassed by the Andromeda Galaxy and the Sombrero Galaxy) and the companion galaxies NGC 247, PGC 2881, PGC 2933, Sculptor-dE1, and UGCA 15 form a gravitationally-bound core near the center of the group. Most other galaxies associated with the Sculptor Group are only weakly gravitationally bound to this core.