A Sea Ghost was inspired by an encounter that took place on George Frederic Watts's honeymoon with his second wife Mary Fraser Tytler. On their return from Egypt, their ship passed through Messina, a harbour city on the northeast coast of Sicily, where it was called upon to tow a disabled vessel. On the subsequent journey, a sea mist enveloped the two vessels as they continued around the Italian coast. Mary, who maintained meticulously detailed diaries throughout their marriage, describes this encounter:

A summer sea fog drifted about us one day, through which Corsica was suddenly revealed like an opal and pearl, and then lost again. The disabled ship loomed strangely through the fog, and two pictures Off Corsica and The Sea Ghost were painted later from the impressions of that day.

In this incredibly atmospheric work, George uses closely varying shades of blue and grey to capture the eerie appearance of the towed ship through the mist. A Sea Ghost is strikingly close to the imagery of Turner, an artist Watts exhibited alongside in London as a young artist.

In naming this work, George deliberately abandons the specific circumstances that inspired the piece. Instead, this title engages with the Romantic motif of a ghost ship: an apparition at sea, unable to dock and fated to wander the seas forever. This nautical legend was popularised in Romantic literature such as Samuel Taylor Coleridge's epic poem The Rime of the Ancient Mariner, first published in 1798, and Richard Wagner's 1843 opera The Flying Dutchman.

For George, the personal value of this work seemed to develop over time. In 1892 he initially planned to sell A Sea Ghost for 300 guineas. However, he changed his mind and decided to keep it in his studio with other key works, which in his words 'must be kept to lend.'

This ambition to keep works for the benefit of the general public invites further comparison with Turner who similarly maintained a collection for the nation. At George's death, he donated a significant number of works to the nation, gifting a collection to both the NPG and Tate.

In addition, Watts Gallery was created just before the artist's death in 1904, to give the general public - specifically the local community - access to art.