The wooden church dedicated to Saint John the Merciful is first mentioned in the land books of 1628-1630. The 1630 book, compiled by Mikhail Trusov and deacon Fyodor Vitov, states that the ancestral estate of Prince Grigory Petrovich Romodanovsky belonged to his children, located at the Bogoyavlenskaya sloboda on the Mstera River. This sloboda housed the stone Church of the Epiphany and the wooden Church of John the Merciful, which contained icons, books, and vestments. In the mid-17th century, a women's monastery was established at the church, although the exact date and founder remain unknown. It is possible that it was a household monastery of the Romodanovsky princesses, some of whom are mentioned in the synodic as schemamonks. According to the description of the sloboda of Mstera in 1710, there was a women's monastery at the Church of John the Merciful with an altar in honor of the Kazan Icon of the Mother of God, which also had a wooden church in honor of Metropolitan Philip. It was here that the famous Mstera embroidery with smooth stitches originated.

In the early 1930s, the temple was converted into a club named after May Day, and later became a club for the Dzerzhinsky oilcloth factory. The wall paintings were painted over, a stage was set up in the altar, the bell tower and fence were dismantled, and the chapel was turned into a shop selling kerosene. By the end of the 1950s, the chapel was also dismantled, and the bricks were used to build a foyer on the north side of the building and a cinema booth with ticket offices on the west side. After such changes, the church lost its original appearance and became a cultural institution.

In 2005, the women's monastery of Saint John the Merciful was revived as a dependency of the Annunciation Monastery in Vyazniki. In 2006, a cross was installed on the monastery grounds, and a dome was placed on the restored Church of John the Merciful. In January 2007, the cross on the dome was consecrated and installed. Currently, the women's monastery of John the Merciful, along with the men's Epiphany Monastery, are the main attractions of Mstera.

Since April 29, 2009, the monastery has been a dependency of the Holy Annunciation Women's Monastery in Vyazniki. By decree of Bishop Nila of Murom and Vyazniki on March 11, 2014, the dependency was transformed into the Archierate Dependency of Saint John the Merciful in the village of Mstera. The abbess of the dependency is nun Fomaida Zuychenko.