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Optical photometric and spectroscopic observations of the eclipsing binary SV Cen were used to derive orbital elements and absolute dimensions of the peculiar early-type contact system. UV spectroscopic observations obtained with the IUE satellite yielded the detection of mass loss from the system forming an expanding circumbinary envelope. SV Cen exhibits a non-uniform rate of period decrease, with major variations on a time scale of a few years. The period changes are explained in terms of loss of angular momentum carried away by the ejected matter. Short-term fluctuations of the stellar wind on a time scale of a few hours were found from an analysis of the envelope line profiles of UV resonance lines. A model of the system is derived, and the evolutionary stage and interaction processes are discussed.