The village of Karagay was founded in 1738 as a Cossack fortress as part of the Upper Yaik fortified line. At that time, a wooden church of the Ascension was built here, which was burned down by the troops of Yemelyan Pugachev in 1774. The church was soon restored, and its consecration took place in October 1779. The new church was already made of stone.

In the 19th century, the Karagay stanitsa had a population of 1,800, which was more than in the Magnitnaya stanitsa. In the Ascension church, Cossacks were baptized and married, among whom were many heroes who faithfully served the Russian state. This stanitsa was the birthplace of the future Metropolitan Viktor Svyatin, the last head of the Russian spiritual mission in China.

After the October Revolution, the church in Karagay was closed, but on January 5, 1937, the authorities allowed it to reopen. The church community, led by priest Grigory Timoshevsky, took over the building, property, and liturgical items, reviving the spiritual life of the village.

However, in 1938, the priest and members of the parish were repressed, and the church was closed again. The domes and bell tower were demolished, and the building was used as a grain storage facility. After the war, it housed a collective farm dairy plant, and since the perestroika, the building remained vacant.

In 2011, an Orthodox community was established in the village of Karagay, and the parish of the Ascension Church was registered. The restoration of the church and the revival of the spiritual life of the village began. For four years, through the efforts of local residents and benefactors, including the management of the Karagay Bor sanatorium, the ancient church was restored in this Ural village.