The Orthodox bishop Stephen of Perm, who lived in the 14th century, is one of the most revered local saints and the first bishop of the Perm diocese. In 1880, a decision was made to build a chapel in Perm in his honor. The initiator of the construction was the Perm protodeacon Evgeny, and the project was developed by the city architect Vasily Vasilievich Popatenko, who personally oversaw the construction. Work began in 1882, and by 1887 the chapel was consecrated. The building, executed in the Russian style, had oval windows that harmoniously fit its modest appearance.

Next to the chapel, it was decided to build the first church-parish school in the city, connected to it by a common wall. The construction of the school was completed quickly, and soon an annex was added, providing space for a psalmists' school and a library-reading room with open access. An organization was also established at the chapel to study church archaeology and publish a local church and regional magazine. However, with the arrival of the Bolsheviks, the chapel and school were closed.

Under Soviet power, the building was repurposed for a communist university. In the following decades, various institutions occupied the former chapel building, and it was only in 1996 that it was returned to the faithful. In 2013, restoration was completed, returning the building to its historical appearance. The chapel is now active, and services are held there.