The chapel's origins lie in the ironworks settlement of Oslättfors bruk, founded in 1697 at the outlet of the Testeboån river. A timber chapel was built on the ironworks street between 1784 and 1796, serving the workers and their families. In 1825 the building was moved to its present site right beside the lake, so close that the sacristy's foundation reportedly sits in the water itself.
The rectangular nave, chancel and sacristy retain the wooden log construction typical of the period, with whitewashed exterior walls decorated with pilasters. It was during the 1825 relocation that the square tower was added at the south end, housing the porch and main entrance beneath a simple classicising doorway. The tower is topped by a shallow domed roof with a lantern, while the nave has a broken mansard roof, hipped over the sacristy to the north. A flat panelled barrel vault was inserted into the interior in 1856, shaping the character of the church interior seen today.
Ownership passed to the Korsnäs ironworks company in 1901, and the chapel was renovated at first but later fell into disrepair as industrial activity declined. Since 1985 it has been owned and maintained by the Oslättfors kyrkostiftelse (church foundation), largely through voluntary effort. In 2007 the tower received fresh rendering, the clock faces were repainted and the cross regilded.
Among the furnishings is a combined altar and pulpit dating from 1796, in the Gustavian style, decorated with symbols of faith, hope and love — the cross, anchor and heart — alongside eucharistic symbols of wheat and chalice. The font dates from 1988, made and donated by a local resident. The organ's case and console date from 1856, though the mechanism itself was renewed in 1989. A bronze church bell, cast in 1759 and still rung by hand, completes the modest but well-preserved collection of furnishings.