Context. The optical ring-like structure detected by Arp (1965) around M 81 (commonly referenced as “Arp's loop”) represents one of the most spectacular features observed in nearby galaxies. Arp's loop is commonly interpreted as a tail resulting from the tidal interaction between M 81 and M 82. However, since its discovery the nature of this feature has remained controversial. Aims: Our primary purpose was to identify the sources of optical and infrared emission observed in Arp's loop. Methods: The morphology of Arp's loop has been investigated with deep wide-field optical images. We also measured its colors using IRAS and Spitzer-MIPS infrared images and compared them with those of the disk of M 81 and Galactic dust cirrus that fills the area where M 81 is located. Results: Optical images reveal that this peculiar object has a filamentary structure characterized by many dust features overlapping M 81's field. The ratios of far-infrared fluxes and the estimated dust-to-gas ratios indicate the infrared emission of Arp's loop is dominated by the contribution of cold dust that is most likely from Galactic cirrus. Conclusions: The above results suggest that the light observed at optical wavelengths is a combination of emission from i) a few recent star-forming regions located close to M 81, where both bright UV complexes and peaks in the HI distribution are found, ii) the extended disk of M 81 and iii) scattered light from the same Galactic cirrus that is responsible for the bulk of the far-infrared emission.