In 1827 a Methodist Society was formed in this community, then known as Washington. On February 16, 1828, representatives of the congregation purchased a parcel of land for the purpose of erecting "a house or place of worship" for its members. The church became known as "Washington Methodist Episcopal Church." In 1874, the congregation erected a new church on its lot at the northwestcorner of Main and Church Streets. This building was sold and moved in 1896. A new building was completed the following year. It was destroyed by fire in 1905. Another church was constructed and dedicated on December 16, 1906. This structure would later serveas Millsboro's Post Office and Public Library.
On December 18, 1928, the trustees of the church,then known as "Grace Methodist Episcopal Church", purchased this site from the State Board of Education. It had previously been the location of the Millsboro Public School. Construction of the present church was commenced in 1949. The building was formally opened on October 8, 1950.