The mill village of Karlholm was founded in the late 1720s by Charles de Geer the elder, after earlier ironworks on the Uppland coast, including Lövstabruk, had been destroyed by Russian raids. Once production began, the de Geer family, known for their concern for the spiritual welfare of their workforce, arranged for a preacher and a chapel to serve the mill community, which technically belonged to Västland parish. The first appointed preacher left within a year, and his successor, Anders Oldberg, went on to serve for around fifty years.
Sources broadly agree the church was completed in 1737, modelled on the recently built Lövstabruk church, though the exact building history before that date is not fully documented. It is a wooden structure with a rectangular plan, a small porch to the west and a sacristy attached to the south side (possibly added later, at the 1890s renovation). The hipped roof is covered with tarred wooden shingles, and the ceiling is formed by a curved vault, originally free-standing but now supported on four pillars.
In 1895 the entire timber building was moved a short distance to its present site on the opposite side of the road, and a substantial renovation around this time gave the church much of its current appearance, including new box pews and a stained-glass window above the altar. The church has never had its own bell tower; the mill's own clock tower, whose weather vane bears the date 1739, has always been used for the bells, of which two survive.atched.'