The present church was built in 1891–92 to designs attributed to the architect Adrian (Crispin) Petersson, replacing a smaller medieval church. Rather than demolish everything, the builders kept the older tower — raised in stages between 1692 and 1705 — and joined it to the new nave. The church was originally built in an ornate Neo-Gothic style, though damp problems set in early, prompting repainting of the interior in 1905 and exterior repairs in 1911. A more thorough remodelling in 1937–38 smoothed away much of the Gothic detailing, rendering and whitening the façades so the church now reads more like a traditional Swedish parish church.
East of today's chancel lies an older five-sided chancel dating from the 1890s rebuilding. It served as the sacristy until the 1960s, when a new sacristy was created beneath the west gallery; the old chancel was later converted, in a further renovation of 1989–90, into a small subsidiary worship space known as the "lillkyrka", reached through a door behind the main altarpiece and retaining its original star-painted blue vault.
The altarpiece is a richly carved Baroque work, originally made around 1696 for Marstrand church and bought for Tegneby in 1807. It presents three scenes stacked vertically: a Last Supper relief at the base, a painted Crucifixion as the main image, and the Ascension above. For a period the paintings were replaced with plaster reliefs by the sculptor Carl Johan Dyfverman; when the original paintings were reinstated after restoration work in the late 1930s, Dyfverman's plaster Last Supper relief was left in place, while his Resurrection scene was rehung elsewhere in the church and his Crucifixion scene moved to the chapel at Nösund, also within the parish.
The carved Baroque pulpit dates from 1638 and is closely comparable to pulpits found in several other churches in Bohuslän. Its basket, decorated with the Evangelists and Danish-language biblical texts, is original, though the base and stairs were remade later. The pulpit stood in the old church before being moved to Nösund's chapel between 1912 and 1938, then returned to Tegneby and restored. The soapstone font, thought to date from the 1200s, is one of the oldest furnishings surviving from the medieval church.
Two bells hang in the tower: an older one from the late medieval period, repaired in the 1920s, and a smaller bell of 1855 recast in 1923. The organ was built in 1963 by the Hammarberg workshop. The church is also linked to a local pilgrim route on Orust, reflecting its long-standing role as a landmark in the district's religious life.