Services have reportedly been held on Sandön since the mid-1700s, for a long period in the local customs house. Around 1912 a bell tower was built outside the customs house, used both to sound the alarm and call people to worship. The Sandhamns kapell foundation was formed in 1921, and building plans followed two years later.
The chapel itself was designed by architect Gustaf Odel, whose drawings were donated to the foundation, and it was built in 1934 under builder Petrus Carlsson. It was consecrated on Holy Trinity Sunday in 1935 by Archbishop Erling Eidem. The building is constructed of white-painted timber, with a nave, a porch to the west and a vestry to the north, all beneath a slate roof. A separate bell tower beside the chapel was raised in 1936, also to Odel's designs, housing a bell cast the same year; electric bell-ringing was installed in 1975.
Among the furnishings, the font of green-patinated bronze was sculpted by Alice Nordin and given, together with a silver christening dish, by the Friends of Sandhamn association in 1945. The altarpiece, dating from 1939, depicts the Transfiguration of Christ and is said to be a copy of a well-known painting by Raphael. Two votive ships were donated to the chapel in 1941, a maritime touch fitting for this sailing community. The pulpit carries carved depictions of Faith, Hope and Charity on one panel and the tablets of the Law on another.
The chapel originally used a harmonium, then received its first pipe organ in 1951, a small mechanical instrument of four stops built by Gustaf Kruse and Gunnar Guhrén. By 2019 this organ was reportedly in poor condition and was replaced with an earlier instrument dating from 1956, built by Einar Berg, which also has a modest handful of stops.