The wish for a chapel of its own in Karungi was first raised in 1725, though it took two decades of discussion before a wooden chapel and bell tower were built on Kyrkholmen and consecrated in the summer of 1745. The chapel is thought to have had an octagonal plan, and its construction was funded through royal grant.
As the local congregation grew, so did the desire for independent parish status, finally granted in 1782. The new parish was named Carl Gustaf's, after Gustav III's second son, who died in early childhood.
Planning for a larger church began in 1785, but disagreement among parishioners over whether to extend the old chapel or build afresh, compounded by war and crop failures, delayed the project for years. Agreement was eventually reached in 1793: the new building would have right-angled corners, unlike the octagonal chapel, and sufficient height to house a future organ. Timber was prepared over the following winter, with households obliged to contribute both materials and labour, including logs for the tower. Construction began in 1796, and although the church is often dated to that year, accounts suggest that services were already being held in 1798 in what was still an unfinished shell of a building.
The present timber church, raised on a stone foundation, has a cross-shaped plan with a chancel to the east and a sacristy to the northeast, and was built to designs from the Överintendentsämbetet. Its exterior, with white-painted standing panelling divided by pilaster strips, is described as Carolean in style, while the interior reflects a later neoclassical remodelling. The tall roof is unusual for retaining its triangular-patterned wooden shingles, and above the crossing sits an onion-domed spire topped with a cross. A painting decorates the centre of the crossing ceiling.
Major alterations followed in the mid-nineteenth century, when the altar was moved to its current position in the eastern arm and the altarpiece, signed by Esaias Svanberg in 1845, was installed within a new architectural frame designed by Ludvig Hawerman. The pulpit, carved by the church's own master builder Hans Hansson Lohiniva, is contemporary with the building, though its gilding was added later. Twentieth-century restorations brought open pews, electric heating in place of iron stoves, and repairs to the roof and windows.
The church's organ has a layered history: an instrument from Pehr Strand of Stockholm was installed in 1820, substantially rebuilt in 1930, and eventually replaced in 1975 by Grönlunds Orgelbyggeri, incorporating some pipework from the earlier Strand organ behind its original façade.