Using HST and ground-based optical and NIR imaging data , we investigate whether the blue compact dwarf (BCD) galaxy I Zw 18 possesses an extended low-surface-brightness (LSB) old stellar population underlying its star-forming regions, as is the case in the majority of BCDs. This question is central to the long-standing debate on the evolutionary state of I Zw 18. We show that the exponential intensity decrease observed in the filamentary LSB envelope of the BCD out to 18�� (1.3�kpc assuming a distance of 15�Mpc) is not due to an evolved stellar disc underlying its star-forming regions, but rather, due to extended ionized gas emission. Ionized gas accounts for more than 80% of the line-of-sight emission at a galactocentric distance of ~0.65�kpc (~3�effective radii), and for 30% to 50% of the R�light of the main body of I�Zw�18. Broad-band images reveal, after subtraction of nebular line emission, a relatively smooth stellar host extending slightly beyond the star-forming regions. This unresolved stellar component, though very compact, is not exceptional for intrinsically faint dwarfs with respect to its structural properties. However, being blue over a radius range of ~5 exponential scale lengths and showing little colour contrast to the star-forming regions, it differs strikingly from the red LSB host of standard BCDs. This fact, together with the comparably blue colours of the faint C component, ~1.6�kpc away from the main body of I�Zw�18, suggests that the formation of I�Zw�18 as a whole has occurred within the last 0.5�Gyr, making it a young BCD candidate. Furthermore, we show that the ionized envelope of I�Zw�18 is not exceptional among star-forming dwarf galaxies, neither by its exponential intensity fall-off nor by its scale length. However, contrary to evolved BCDs, the stellar LSB component of I�Zw�18 is much more compact than the ionized gas envelope. In the absence of an appreciable underlying stellar population, extended ionized gas emission dominates in the outer parts of I�Zw�18, mimicking an exponential stellar disc on optical surface brightness profiles.