Optically the compact region S 106 appears as a bipolar nebula with the exciting stellar source located between the lobes and embedded in a flat disk of material of high visual extinction. Associated with the nebula is a massive molecular cloud exhibiting a rotating disk-like structure, the axis of rotation being observed in the same direction as the bipolar axis of the nebula. We analyse new optical and near-infrared spectra obtained with an image-tube spectrograph. The emission line spectrum of both lobes resembles that of the Orion nebula and indicates high electron density throughout. The nebular continuum discovered in both lobes is interpreted as originating from an early-type stellar source between the lobes, and scattered by dust particles coexisting with the ionized gas within the lobes. The Hsub(..cap alpha..) radial velocity field indicates supersonic motion of ionized material flowing radially outward through the lobes. The shape and kinematic structure of the lobes are in qualitative agreement with the predictions of the champagne model of Tenorio-Tagle (1979) applied to the case of star formation near the center of a disk-shaped dense cloud.