We investigate the spatial extent and structure of the Pegasus dwarf irregular galaxy using deep , wide-field , multicolour CCD photometry from the Sloan Digital Sky Survey ( SDSS ) and new deep HI observations . We study an area of \sim 0.6 square degrees centred on the Pegasus dwarf that was imaged by SDSS . Using effective filtering in colour-magnitude space we reduce the contamination by foreground Galactic field stars and increase significantly the contrast in the outer regions of the Pegasus dwarf . Our extended surface photometry , reaches down to a surface brightness magnitude \mu _ { r } \simeq 32 mag arcsec ^ { -2 } . It reveals a stellar body with a diameter of \sim 8 kpc that follows a Sérsic surface brightness distribution law , which is composed of a significantly older stellar population than that observed in the \sim 2 kpc main body . The galaxy is at least five times more extended than listed in NED . The faint extensions of the galaxy are not equally distributed around its circumference ; the north-west end is more jagged than the south-east end . We also identified a number of stellar concentrations , possibly stellar associations , arranged in a ring around the main luminous body . New HI observations were collected at the Arecibo Observatory as part of the ALFALFA survey . They reveal an HI distribution somewhat elongated in RA and about 0 \aas@@fstack { \circ } 3 wide , with the region of highest column density coincident with the luminous galaxy . The HI rotation curve shows a solid-body rotation behaviour , with opposite ends differing by 15 km s ^ { -1 } . There is a stream to lower velocities about 5 arcmin from the centre of the galaxy . We were able to measure ugriz colours in a number of apertures using the SDSS data and compared these with predictions of evolutionary synthesis models . The results indicate that the outermost regions of PegDIG are 5–10 Gyr old , while the inner kpc contains stars \sim 1 Gyr old and younger . The colours correspond to K-stars ; earlier subclasses are located in the innermost parts of the galaxy . PegDIG appears to be a relatively low-mass object , with a total dynamical mass of 3 \times 10 ^ { 8 } M _ { \odot } of which only 30 % in stars and 2 % is in neutral gas . The extended stellar distribution , the appearance of faint light extensions , and the lack of low column density HI tails rule out a possible tidal origin or a ram pressure stripping scenario . We propose that PegDIG is a fairly recent acquisition by the Local Group , since it does not appear to be disturbed by interactions with other galaxies .