The first Methodist class was formed in Shipton in 1780. Its members met in private homes until 1817 when a permanent chapel was built on land sold to them by the Dawson family to the west of the main road.

At this time the nearest Anglican parish church was two miles away in the village of Overton. A parish church was built and endowed for Shipton in 1849 and both Methodist and Anglican congregations continued in tandem throughout the nineteenth century, despite the small size of Shipton, whose population never exceeded 440 people. There was also, briefly, a Primitive Methodist chapel between 1868 and 1874.

Shipton Chapel had a Sunday School by 1881. The congregation purchased a new organ in 1903 and the chapel was repaired in 1905.

From the 1920s onwards plans were underway to replace the chapel with a new and more modern building. However it was not until 1955 that a new site was purchased to the east of the main road. The new school-chapel opened later the same year. Plans to build a larger chapel nearby never came to fruition and the old chapel building was sold.

Originally part of the single York Circuit of the Wesleyan Methodist Connexion, Shipton became part of York, New Street Circuit (renamed Clifton in 1909) from 1867. Following the unification of the Primitive, Wesleyan and United Methodist churches in 1932, Shipton continued as part of the York, Clifton Circuit of what was now a unified Methodist Connexion. In 1957 it became part of York, Clifton & Monkgate Circuit and from 1972 it was part of the new York, North Circuit. In 2012 it joined the York Circuit of the Methodist Connexion.

In 2013 the chapel ceased to be used for regular worship.