The title of closest galaxy goes to the newly discovered Canis Major dwarf galaxy, which supplanted the Sagittarius dwarf elliptical galaxy in November 2003.
The Canis Major dwarf galaxy lies 25,000 light-years from Earth and is 42,000 light-years from the center of our galaxy. At one time, this galaxy may have had one billion stars, but its proximity to the much larger Milky Way has distorted its shape, and the bulk of its matter has been distributed along its orbit. In a way, the Milky Way is cannibalizing the Canis Major dwarf galaxy, and as much as one percent of the matter in our galaxy may have come from this small companion.