This chapel belongs to the Kirkjubaejarklaustur benefice in the Skaftafell deanery.  It was consecrated on the 17^th of June 1974 to commemorate the millennium of the inhabitancy of Iceland.  Its construction was decided in 1965 on the 175 anniversary of Rev. Jon Steingrimsson.

It was built just east of the ancient church foundations, which are considered by many to represent the oldest such in the country.  In 1186 a Benedictine convent was founded at Kirkjubaejarklaustur.  It was abolished in the middle of the 16^th century, when the Icelanders were reformed.  Its ruins are still conspicuous at Kirkjuholar.  Kirkjubaer was a church site until 1859, when the parish church was moved to Prestbakki.  Rev. Jon Steingrimsson lies buried in the old cemetery at Klaustur with a prominent gravestone made of columnar basalt.

He was the Rev. of the parish during the earth’s largest historic eruption.  His documentation of this natural catastrophe and the consequent hardships is considered the best source available.  His powerful sermon in the parish church on July 20^th 1783, when the lava flow threatened to overrun the settlement is said to have stopped it in its tracks.  Consequently it was called the “Sermon of Fire”.