The oldest parts of Hanhals kyrka date from the early medieval period, probably the 13th century. Porches were added at the north and south sides towards the end of the Middle Ages, and in 1764 the church was lengthened and given a rounded chancel end. By the late 19th century, however, the congregation had outgrown the old building.
In 1892–1894 a new church in neo-Gothic style, designed by Adrian C. Peterson, was built on the plain about a kilometre away. Rather than being demolished, the old medieval church was left standing as a ruin, its fittings and roof removed and eventually scattered. The ruin was conserved in the 1920s to halt further decay. Meanwhile the new church suffered persistent damp problems, and in 1936, before a planned rebuilding could go ahead, it was destroyed by fire.
Following the fire, the decision was taken to rebuild and restore the old medieval church instead. The work, overseen by county antiquarian Erik Salvén and Halmstad city architect Figge Wetterqvist, gave the building its present white-rendered exterior, a sacristy in the former north porch, and a new west entrance. The church was reconsecrated in 1940, and a wooden bell tower was raised on a nearby hill the same year.
Inside, the vaulted ceiling carries painted decoration originally created in 1770 by Jonas Dürchs. Many of the original painted boards had been stored at a Gothenburg museum, and further boards were returned by parishioners who had put them to other uses after the church was abandoned; missing sections were reconstructed by Erik Sköld, including a depiction of the eye of God added in 1940. The nave ceiling shows six figurative scenes set against a painted sky.
Among the church's furnishings is a stone font attributed to the medieval carver Thorkillus, thought to date from the first half or middle of the 13th century; the original is held at the Swedish History Museum, with a copy from around 1940 in the church. The oak pulpit dates from the 1600s, and the altar cabinet is a medieval triptych depicting the Coronation of the Virgin, dated to the late 15th century. Two votive ships from the 1600s, on loan from Gothenburg City Museum, also hang in the church. The two bells in the tower were cast from metal salvaged from those lost in the 1936 fire.