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 lesssim z lesssim 2.0, we find no strong (rest-frame equivalent width Wrgtrsim 1.0 Å) absorption features in the wavelength range 4000-10000 Å. The sole significant feature is a weak doublet that we identify as Mg II λλ2796 (Wr = 0.18 +/- 0.02 Å), 2803 (Wr = 0.08 +/- 0.01 Å) 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 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 z > 1, where galaxy mergers occur more frequently.Based in part on observations obtained at the Gemini Observatory, which is operated by the Association of Universities for Research in Astronomy, Inc., under a cooperative agreement with the NSF on behalf of the Gemini partnership: the National Science Foundation (US), the Particle Physics and Astronomy Research Council (UK), the National Research Council (Canada), CONICYT (Chile), the Australian Research Council (Australia), CNPq (Brazil), and CONICET (Argentina).