The super-massive black hole is located inside the galaxy NGC 1277 in the constellation Perseus.
It makes up about 14 per cent of its host galaxy's mass, compared with the 0.1 per cent a normal black hole would represent, scientists said, adding that it has a mass equivalent to 17 billion Suns.
This galaxy and several more in the same study could change theories of how black holes and galaxies form and evolve.
The galaxy is only ten per cent the size and mass of our own Milky Way. Despite NGC 1277's diminutive size, the black hole at its heart is more than 11 times as wide as Neptune's orbit around the Sun.
"This is a really oddball galaxy. It's almost all black hole. This could be the first object in a new class of galaxy-black hole systems," said team member Karl Gebhardt of The University of Texas at Austin.
Furthermore, the most massive black holes have been seen in giant blobby galaxies called "ellipticals," but this one is seen in a relatively small lens-shaped galaxy.
The study's endgame is to better understand how black holes and galaxies form and grow together, a process that isn't well understood.
"At the moment there are three completely different mechanisms that all claim to explain the link between black hole mass and host galaxies' properties. We do not understand yet which of these theories is best," said lead author Remco van den Bosch in a statement.
The problem is lack of data. Astronomers know the mass of fewer than 100 black holes in galaxies. But measuring black hole masses is difficult and time-consuming.
So the team developed the Hobby-Eberly Telescope Massive Galaxy Survey to winnow down the number of galaxies that would be interesting to follow up on.
The team has studied 700 of their 800 galaxies with the telescope.
"The mass of this black hole is much higher than expected," Gebhardt said, "It leads us to think that very massive galaxies have a different physical process in how their black holes grow".
The study was published in the journal Nature.