We present the first optical study of the supernova remnant (SNR) G7.7-3.7, with the aim of determining its evolutionary phase since it has been suggested to be the remnant of SN 386 AD. We obtained narrow-band images in the filters H α + [N II], H β, [O III], [S II] that revealed faint optical emission in the southern region of the SNR consisting of two filaments elongated in the east-west direction aligned with the X-ray emitting region of the remnant. The filaments were seen in H α + [N II], [O III] images and marginally in the [S II] images, with a non-detection in H β. Long-slit spectroscopy of the three regions along one filament revealed large ratios of [S II]/H α = (1.6-2.5), consistent with that expected for a shock-heated SNR. The [S II] doublet ratio observed in two of the regions implies an upper limit for the electron density of the gas, with estimates falling below 400 cm-3 and 600 cm-3 in the respective areas. We discuss potential physical mechanisms that formed the observed optical filaments and we suggest that most likely they resulted by a collision of the SNR with a dense circumstellar shell lying at the southern region of the remnant.