We present a study of the MgII absorption system at z=0.558 towards the BL Lac object PKS 0118-272 based on high resolution spectra (λ/{DELTA}λ=~2x10^4^) obtained at the 3.6m ESO telescope and on direct imaging data obtained at the 3.5m ESO New Technology Telescope. At the redshift of the absorber we detect lines of the low ionization species MgI, MgII, CaII, TiII, MnII, and FeII. Most of the lines are unsaturated and we determine accurate column densities for all the species but MgII. The derived column densities are typical of the interstellar gas in the disk of the Galaxy. By assuming dust-free gas with solar abundances these column densities yield N(HI)>2.5x10^19^cm^-2^ however, the relative elemental abundances suggest that some dust is present and that N(HI)=~2x10^20^cm^-2^. The inferred HI column density indicates that the absorber is a Damped Lyα system. We find [Ti/Fe]=+0.3, in agreement with [Ti/Fe] measurements in DLA absorbers, but [Mn/Fe]=+0.4, at variance with the values [Mn/Fe]<0 common to DLA systems. The measured [Ti/Fe] and [Mn/Fe] ratios match remarkably well the differential depletion pattern of low-density interstellar clouds in the Galaxy. Unlike high-redshift DLA systems (z>=2), the z=0.558 absorber seems to originate in a galaxy that has already attained the abundances and dust content of present-day disk galaxies. The analysis of our imaging data lends support to the presence of an intervening galaxy. After a careful subtraction of the BL Lac image, an object at 1.6" from PKS 0118-272 is detected. At the absorber redshift the projected distance of this close companion (14h_50_^-1^kpc) and its absolute magnitude (M_R_=~-22.3) are consistent with those found for galaxies associated with low-redshift DLA systems.