The land on which Capon Chapel was built belonged to William C. Nixon (1789–1869), a member of the Virginia House of Delegates. Nixon's mother-in-law, Elizabeth Caudy (1773–1816), was the first person to be buried in the church's cemetery. While various sources estimate that Capon Chapel was built around the 1750s, there is no physical or documentary evidence to support this claim. The first documented mention of a church at the Capon Chapel site was in March 1852, when Joseph Pugh allocated 88 and one-half poles, or approximately , to three trustees: David Pugh, another David Pugh, and Robert Pugh. The Pugh family, which was of Welsh descent, were early settlers in the Cacapon River Valley, and were one of the families that came from Wales through Pennsylvania in the late 17th century. The grant's deed told the trustees to conceive "a Graveyard and for a house for the Public Worship of Almighty God for the use of all orthodox Christians", and specified that the land was only to be used for religious worship and "for no other purpose". The deed further stipulated that inheritors of the land had to be Pugh's descendants.