The first church at Búðir was built in 1703.
At that time, sources say, there were around 120 people registered in the parish.
That was a small turf church with a cemetery but burials have been at Búðir since 1705.
Over time the church fell into disrepair and was finally abolished by royal letter in 1816 due to its condition.
Steinunn Sveinsdóttir, a widow who lived at Búðir in the mid-19th century, applied for permission to the Church authorities to rebuild a church at Búðir.
She was the one who led and paid for the erection of the wooden church that still is today.
The construction finished in 1848 but the church was first consecrated in 1851. Steinunn died in 1854, then 77 years old. She is buried in Búðir cemetery and there still stands a gravestone in memory of her.
Through the years the church has gone through a lot of changes. The last reconstruction was in 1987 when local people and experts, f.x. from the National Museum of Iceland rebuilt it the way it was when it was first constructed in 1848.