The church was built in 1772–1773 at the initiative of ironworks owner Mathias Krapp the younger, and from 1797 served the Lagfors works parish, which was then part of the Lögdö ironworks group. It stands as a reminder of the era when Lagfors ironworks flourished. Its octagonal timber form and much of the original interior fittings survive, giving visitors a sense of eighteenth-century rural church design linked closely to industrial patronage.
In 1778 King Gustav III granted permission for the church to be named "Gustaf's Church" in his honour, and it was renamed accordingly, though it is generally known today as Lagfors kyrka.
By the twentieth century the building had fallen into disrepair, and it was restored in the 1930s, when a new roof and external cladding were added. Ownership later passed to Ljustorp parish as a gift from the forestry company SCA, and the church underwent a further restoration in 1985.