We have identified the optical counterpart of the EUV transient source RE J1255+266 with an ~18 mag blue star which has an unusual optical spectrum showing a blue continuum and broad Balmer absorption lines characteristic of a DA white dwarf, together with intense narrow H Balmer and HeI lines in emission. Subsequent optical spectroscopy and photometry, together with near-IR photometry, demonstrate that this system is most likely a cataclysmic variable (CV) system with a high-mass white dwarf and very low-mass companion viewed almost pole-on (i.e. inclination <e1>i<</e1>5 deg). At the time of our observations the system appears to be in its quiescent state with very little continuum emission from the disc. Fitting of the broad Balmer absorption lines yields temperature and gravity estimates for the white dwarf. These measurements provide a means of estimating the distance to RE J1255+266; we find d=180^+80-55 pc. At this distance the outburst EUV luminosity of RE J1255+266 is L_EUV<~10^34 erg s^-1. The large observed EUV luminosity of the outburst may be due to the viewing geometry of this system which favours a direct and unobscured view of the EUV/soft X-ray emission region in the boundary layer between the white dwarf and the inner accretion disc.