We present a comprehensive multiwavelength analysis of the bright, long duration gamma-ray burst GRB 070125, comprised of observations in $gamma$-ray, X-ray, optical, millimeter and centimeter wavebands. Simultaneous fits to the optical and X-ray light curves favor a break on day 3.78, which we interpret as the jet break from a collimated outflow. Independent fits to optical and X-ray bands give similar results in the optical bands but shift the jet break to around day 10 in the X-ray light curve. We show that for the physical parameters derived for GRB 070125, inverse Compton scattering effects are important throughout the afterglow evolution. While inverse Compton scattering does not affect radio and optical bands, it may be a promising candidate to delay the jet break in the X-ray band. Radio light curves show rapid flux variations, which are interpreted as due to interstellar scintillation, and are used to derive an upper limit of $2.4 times 10^{17}$ cm on the radius of the fireball in the lateral expansion phase of the jet. Radio light curves and spectra suggest a high synchrotron self absorption frequency indicative of the afterglow shock wave moving in a dense medium. Our broadband modeling favors a constant density profile for the circumburst medium over a wind-like profile ($R^{-2}$). However, keeping in mind the uncertainty of the parameters, it is difficult to unambiguously distinguish between the two density profiles. Our broadband fits suggest that event is a burst with high radiative efficiency ($> 60 %$).
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