We present deep images of the field of \gamma -ray burst ( GRB ) 990123 obtained in a broad-band UV/visible bandpass with the Hubble Space Telescope , and deep near-infrared images obtained with the Keck-I 10-m telescope . Both the HST and Keck images show that the optical transient ( OT ) is clearly offset by 0.6 arcsec from an extended object , presumably the host galaxy . This galaxy is the most likely source of the metallic-line absorption at z = 1.6004 seen in the spectrum of the OT . With magnitudes V _ { C } \approx 24.6 \pm 0.2 and K = 21.65 \pm 0.30 mag this corresponds to an L \sim 0.7 ~ { } L _ { * } galaxy , assuming that it is located at z = 1.6 . The estimated unobscured star formation rate is SFR \sim 6 ~ { } M _ { \odot } yr ^ { -1 } , which is not unusually high for normal galaxies at comparable redshifts . The strength of the observed metallic absorption lines is suggestive of a relatively high metallicity of the gas , and thus of a chemically evolved system which may be associated with a massive galaxy . It is also indicative of a high column density of the gas , typical of damped Ly \alpha systems at high redshifts . We conclude that this is the host galaxy of GRB 990123 . No other obvious galaxies are detected within the same projected radius from the OT . There is thus no evidence for strong gravitational lensing magnification of this burst , and some alternative explanation for its remarkable energetics may be required . The observed offset of the OT from the center of its apparent host galaxy , 5.5 \pm 0.9 proper kpc ( projected ) in the galaxy ’ s rest-frame , both refutes the possibility that GRBs are related to galactic nuclear activity and supports models of GRBs which involve the death and/or merger of massive stars . Further , the HST image suggests an intimate connection of GRB 990123 and a star-forming region .