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We present the discovery and high signal-to-noise ratio spectroscopic observations of the optical afterglow of the long-duration gamma-ray burst GRB 070125. Unlike all previously observed long-duration afterglows in the redshift range 0.5 [?] z [?] 2.0, we find no strong (rest-frame equivalent width Wr[?] 1.0 A) absorption features in the wavelength range 4000-10000 A. The sole significant feature is a weak doublet that we identify as Mg II ll2796 ( Wr = 0.18 +- 0.02 A), 2803 ( Wr = 0.08 +- 0.01 A) at z = 1.5477 +- 0.0001. The low observed Mg II and inferred H I column densities are typically observed in galactic halos, far away from the bulk of massive star formation. Deep ground-based imaging reveals no host directly underneath the afterglow to a limit of 25.4"/> R > 25.4 mag. Either of the two nearest blue galaxies could host GRB 070125; the large offset ( d [?] 27 kpc) would naturally explain the low column densities. To remain consistent with the large local (i.e., parsec scale) circumburst density inferred from broadband afterglow observations, we speculate that GRB 070125 may have occurred far away from the disk of its host in a compact star-forming cluster. Such distant stellar clusters, typically formed by dynamical galaxy interactions, have been observed in the nearby universe and should be more prevalent at 1"/> z > 1, where galaxy mergers occur more frequently.