The church's first phase was built by farmers of Åre parish, with tree-ring analysis suggesting the chancel (now the sacristy) and nave date from the mid-to-late 1100s, possibly as early as 1156. At the time Jämtland was under Norwegian rule, and the building shows the influence of contemporary Norwegian churches. Its position, roughly midway between the place names Frönäset and Ullån, both linked to pre-Christian Norse gods, may have been a deliberate choice, and the church likely also served pilgrims travelling the route towards Olaf the Holy's grave at Nidaros, present-day Trondheim.
As the local population grew, the church became too small, and in 1736 it was extended to double its original length, from around 11 to 23 metres. This rebuilding gave the church its current interior and larger windows, though some medieval elements remain. A freestanding wooden bell tower with an onion dome, typical of Jämtland's 18th-century style but unusually built on a stone rather than timber foundation, was added between 1755 and 1760.
By the late 19th century the parish had built a larger church nearby at Duved, and the old church at Åre fell into disuse, seeing only occasional summer services. Rather than being left to decay, it was restored in the early 1900s so it could return to regular use, and further repairs followed through the 20th century, including work to the bell tower as recently as 2012.
Many of the original furnishings were transferred to the new church at Duved in the 1890s, though some, including a pair of 18th-century chandeliers and a font topped with a carved pelican, were later brought back. A wooden statuette of St Olaf, believed to have been carved in Trøndelag in the 1300s, remains one of the church's most striking objects. Its original crown went missing at some point, and in 1719 it was replaced with a Karolinian tricorne hat, reportedly by a young wounded soldier from Åre who had survived Armfeldt's disastrous winter march earlier that year. The statue itself was stolen in 1983 and later recovered buried near the lake; a smaller theft, of an 18th-century hourglass, was reported in 2016.