In 1896 the Old Boys of Kelly College at Tavistock decided to establish a mission in the Three Towns.  As it happened the vicar of the Anglican Church of Saint James the Great at Keyham, had been planning to provide such a mission in an area of the parish that had no religious provision, namely Pottery Quay, Tamar Wharf, John Street and William Street.  The Old Boys persuaded the College to take over this project and they began to pay half of the stipend of the missionary-in-charge.   The first missionary was the Reverend A S Rashleigh, who went on to become the vicar of Saint Wenn in Cornwall.  It was given the name of Saint Chad's Mission.

The foundation stone of the Kelly College Mission was laid on Monday June 18th 1900 by the Commander-in-Chief, Plymouth, Admiral the Right Honourable Lord Charles Montagu-Douglas-Scott, KCB.  The freehold site of the Mission was given by Lord Saint Levan.

Only the ground floor was completed, which provided a large hall for a Sunday School and several smaller rooms for men's and boy's clubs.  The girls were fully occupied helping their mothers with the cooking and cleaning, of course.  This building was dedicated by the Bishop of Crediton on October 2nd 1901.  As funds became available so the chapel capable of holding 250 worshippers was constructed over the top.

On August 19th 1909 a further foundation stone was laid on the ground floor by Lady Saint Levan, said to mark the permanency of the new Church.   The Bishop of Crediton again performed the dedication service, this time specifically to Saint Chad, on March 1st 1910. 

In 1933 it was made a conventional district and ceased to come under Saint James the Great.

Services ceased to be held in Saint Chad's after Christmas 1954 and it was used as a church hall until 1956, when the Admiralty decided to restore the Church and bring it within the Royal Dockyard as the new Dockyard Chapel of Saint Lo.