The church was founded by Robert Butt, who was born in Mere and had a flourishing grocery business in Warminster. He had returned to Mere in failing health and when taking the waters at Bath had met the well known preacher William Jay (born in nearby Tisbury), who had suggested him providing a place for preaching in Mere. In 1795 he built the chapel, at a cost of £650, and a house for himself at the corner of Dark Lane. The congregation increased substantially and in the 1820s and '30s the chapel had to be enlarged twice. In 1852 it was decided to build a new and larger chapel, which was designed by W.J. Stent of Warminster. A large school room for the British School was provided under the chapel. The membership continued to increase and in 1868 the present chapel was built with galleries on either side for young people - boys on one side and girls on the other. The money was provided by the local industrialist Charles Jupe who, with his wife, had left the Church of England in 1829 and become Congregationalists. The former chapel, to the right of the present one, was taken over completely for the British School, and was refronted. Although the congregation declined in the late 19th century, after the silk mills closed and people moved away to obtain jobs elsewhere, the chapel was flourishing again by the early 20th century. In the Second World War all buildings, except the chapel itself, were taken over by the army.
From 1971 the minister has been shared with Shaftesbury and in 1972, when the Congregationalists and Presbyterians joined together, the name was changed to the United Reformed Church.