The present church was founded in 1695 and consecrated in the autumn of 1697, although building work was not yet fully complete. It replaced an earlier chapel, possibly used by fishermen, which had stood at Söderboda on Gräsö's northern shore before falling into disrepair and being demolished around 1640. The design of the new church has been tentatively linked to the architect Johan Hårleman.
Built of horizontal log timber on a boulder foundation, the church has a distinctive roof shape, sometimes likened to that of a manor house, and a porch to the west that is only half the height and width of the main building. A sacristy was added to the north side in 1753. The exterior has remained largely unchanged since the church was built, giving it a strong sense of its Caroline-period origins.
The building suffered during the Russian raids of 1719, when it was vandalised and used as a stable; it took a further 25 years before funds allowed for repairs. Later restorations, notably in 1887 and again in 1930–1933 under architect Sigge Ullén, altered and then partly recovered the painted decoration of the pulpit, altar rail and organ loft. A further restoration took place ahead of the church's 300th anniversary in 1997.
Inside, the nave has an elongated octagonal shape, created by angled corner walls, with the gallery dating from 1748–49. Among the furnishings, the gilded oak altar cabinet stands out: made in the later fifteenth century, probably in Sweden, it was bought from Edebo church in 1743 and given to Gräsö. A crucifix thought to date from the 1500s may have come from the earlier chapel, and a rigged votive ship, acquired in 1765, hangs in the nave.
A free-standing octagonal bell tower to the east of the church dates from the 1740s, replacing an earlier structure built in 1696 and demolished in 1742. Its two bells were cast in 1750 and 1788; an earlier iron bell was reportedly seized by Russian forces in 1719. Near the west entrance, a small iron poor box on a post, dated to 1747, survives with an inscribed board added in 1863.