We present a compilation of Hubble Space Telescope (HST) images of 58 luminous Sloan Digital Sky Survey (SDSS) type 2 active galactic nuclei (AGNs) at ?. Of these, 42 are type 2 quasars, which is a good representation of all optically selected SDSS type 2 quasars in this z range. We find that the majority of the host galaxies are ellipticals (30/42 or 71 per cent). This is consistent with studies of radio-loud and radio-quiet type 1 quasars, which show that their host galaxies are, in general, ellipticals. A significant fraction of type 2 quasars (≥25/42 or ≥59 per cent) show clear signatures of morphological disturbance. In most cases, these are clearly identified with merger/interaction processes. We discuss this in the context of related works on type 2 quasars and powerful radio galaxies. We study in detail the particular case of the radio-quiet type 2 quasar SDSS J143027.66-005614.8 at z= 0.318 based on imaging and spectroscopic data from the Very Large Telescope, HST and SDSS. The system shows highly complex morphology, similar to that found in many ultraluminous infrared galaxies, which suggests that it is in the late pre-coalescence stage of a major galaxy merger. The optical continuum spectrum is dominated by a young stellar population of age <80 Myr, probably formed as a consequence of the merger-induced starburst. Ionized gas is confirmed up to a maximum total extension of r˜ 13 kpc from the quasar, although gas is also possibly detected at up to r˜ 32 kpc. The ionizing mechanism, AGN versus stellar photoionization, varies depending on the spatial location. There is a nuclear (r≤ few kpc) ionized outflow, which is blueshifted by ˜520 km s-1 relative to the systemic redshift and has FWHM ˜ 1600 km s-1. Several × 105 M&sun; at most are expected to participate in the outflow. We discuss the global properties of the object in the context of theoretical and observational studies of galaxy mergers/interactions and their role in the triggering of the nuclear and star formation activities in the most luminous active galaxies. Based on data from the Sloan Digital Sky Survey, the European Southern Observatory (Paranal, Chile; programme 087.B-0034) and observations made with the NASA/ESA Hubble Space Telescope, and obtained from the Hubble Legacy Archive, which is a collaboration between the Space Telescope Science Institute (STScI/NASA), the Space Telescope European Coordinating Facility (ST-ECF/ESA) and the Canadian Astronomy Data Centre (CADC/NRC/CSA) (programme 10880).