It is located in the village of Hestad, on a small peninsula jutting into the Hestadfjorden, a lake that is part of the river Gaula.

It is one of the four churches for the Gaular parish which is part of the Sunnfjord prosti (deanery) in the Diocese of Bjørgvin.

Legend has it that there was a church at Øyra the 12th century, but in written sources it is first mentioned in accounts from 1327.

The church was owned by a number of local farmers until 1917 when it was purchased by the Society for the Preservation of Ancient Norwegian Monuments (Fortidsminneforeningen).

The chapel and surrounding area are protected due to historical and natural qualities.