That earlier church was demolished in the 1620s on the orders of Carl Carlsson Gyllenhielm, who held the nearby estate of Arbottna, and a new building was commissioned in its place. The present timber church, resting on a stone foundation, was consecrated in 1630. Tradition holds that King Gustav II Adolf attended the consecration shortly before departing to fight in the Thirty Years' War, though this remains a local tradition rather than a documented fact.
By the nineteenth century the building had grown dilapidated, and it was substantially rebuilt in 1876–1877, though the original timber frame was retained. The interior was renovated again in 1952. A separate wooden bell tower, dating from the seventeenth century, stands on a small hill to the west of the church, while the parish hall lies to the north-east.
Inside, the altarpiece was donated to the church in 1770 by Adolf Ludvig Levin, then owner of the Arbottna and Ludvigsberg estates. It depicts Christ on the cross with Mary Magdalene kneeling at his feet, and local tradition attributes the painting to Per Krafft the Elder, though this cannot be verified. A votive ship in the form of a late nineteenth-century full-rigger also hangs in the church, a common feature in Swedish coastal parishes reflecting the maritime life of the congregation.
The church has had at least two organs: an 1883 instrument by E A Setterquist & Son of Örebro, and the current mechanical organ built in 1955 by Grönlunds Orgelbyggeri of Gammelstad.
Today Muskö kyrka continues to serve the parish of Västerhaninge-Muskö, formed in 2002 through the merger of the former Muskö and Västerhaninge parishes.