A chapel was first built at Holmsjö in the early 1500s to serve the sparsely populated northern part of the ancient Fridlevstad parish, near the old border between Sweden and Denmark. It was burned down by Swedish forces in 1564 during the Nordic Seven Years' War. A replacement timber chapel went up in 1766–68, later becoming a full parish church when Sillhövda gained independent status in 1869.
That wooden church was destroyed by fire on 19 May 1940, after flames spread through the shingle roof near the chimney. The congregation was without a church for six years while a new building was planned. Architect Herbert Kockum drew up designs in 1941, though wartime conditions delayed construction until 1944. The new church, built in a historicising style with heavy piers supporting cross-vaults in a basilica-like nave and an integrated apse, was consecrated on the second Sunday of Advent in 1945 by Bishop Edvard Rodhe.
The church's most notable possession is a medieval altar cabinet, generally dated to about 1470–1480 and regarded as the oldest in Blekinge. Its central scene depicts the Coronation of the Virgin, with God the Father and Christ seated either side of Mary, flanked by Saint Laurentius and an unidentified knight-saint, possibly Saint Magnus. The wings carry carved figures of the twelve apostles; these may be the work of a workshop associated with Bernt Notke, though the central group appears older. According to parish sources the cabinet was acquired from Torhamns kyrka in 1776.,
The oak pulpit, made in 1945, carries five carved figures in lime wood by sculptor Erik Sand, said to represent revelation through the ages — including Moses, a prophet, Christ, a local missionary figure, and a Reformation-era churchman. The granite font, in Backaryd granite, dates from the same year. In the churchyard stands an older wooden bell tower from 1768, tarred and shingled, which survived the 1940 fire; a limestone gravestone dated 1677, thought to originate from the earlier Holmsjö chapel, lies as a step outside it.
Among the furnishings is a painting of the Madonna and Child attributed to the seventeenth-century Italian painter Giovanni Battista Salvi, said to have been donated to the church by a private benefactor from Karlskrona. The pneumatic organ in the west gallery was built in 1953 by Johan Grönvall of Lilla Edet, replacing an earlier instrument of 1871.