The timber church of Hiona St Stephen's is one of the oldest surviving buildings in the eastern Bay of Plenty, the history of which reflects the fluctuating relations between Maori and Pakeha in the region. Erected in 1862-1864, the building was initially part of the Church Missionary Society (CMS) base in the coastal settlement of Opotiki. Both the CMS station and a rival Catholic mission had been established in 1840-1841 close to Pakowhai, a large Whakatohea stronghold. Christianity was earlier introduced to the district by missionary-trained Maori teachers, who facilitated a signing of the Treaty of Waitangi by seven chiefs at Opotiki in May 1840. The present church replaced a chapel erected on or close to the same site in 1843, which was probably constructed of raupo. A large and impressive building for its location, the new structure overshadowed the nearby Catholic church. The building was erected after the settlement had prospered by supplying Auckland with produce through the use of an extensive coastal fleet. Construction was overseen by the Reverend Carl Völkner (1819-1865), a German of Lutheran background, who had been appointed to Opotiki in 1861.

Initially known as Hiona (Zion), the church consisted of a nave, with a tower and steeple at its western end. It was erected by two Auckland builders, Thomas Bridson and John Wilson at a cost of more than £600, with local Maori contributing most of the funds. The rimu used in its construction is believed to have been felled and pit-sawn by members of Ngati Porou at nearby Waioeka, who were familiar with colonial timber-working methods. Possibly designed by Völkner himself, the church is said to resemble churches from the European continent. It is also similar, however, to earlier CMS churches in New Zealand such as the 1839 structure at Te Waimate mission (see 'Church of St John the Baptist, Waimate North').

The opening of the church in January 1864 coincided with attempts by Whakatohea to help defend the Waikato and Tauranga against military colonial invasion in the third New Zealand - or Waikato - War (1863-1864). During this period Völkner actively passed on information to the colonial authorities and may have been partly blamed for the death of Whakatohea chief Te Aporotanga, who was killed following the Battle of Te Kaokaoroa (1864). After returning from a trip to Auckland in March 1865, Völkner was taken prisoner by visiting adherents of the Pai Marire faith, and was hanged from a willow tree near the church. His companion, Thomas Grace (1815-1879), was also put on trial in the church the following day, but was spared. The killing spread alarm in the New Zealand settler community, particularly when details emerged that Völkner's body had been decapitated and his eyes consumed, evoking fears that earlier cannibal traditions were being revived. Völkner's remains were buried outside the east end of the church, the closest location to the altar.

The killing instigated an invasion of Opotiki by colonial forces in late 1865, when the church was used as a military headquarters and enclosed within a redoubt. Early settlers who arrived after the subsequent confiscation of Whakatohea lands often took shelter in the building as Maori resistance continued. Taken over by the Armed Constabulary in 1868, the tower was used as secure accommodation for prisoners. The church was also employed for dancing and other entertainment. The building was eventually refurbished and consecrated in 1874-1875 as St Stephen the Martyr, a title reflecting the settler belief that Völkner had died for his faith. Used as a parish church since that time, the structure was enlarged in 1910, enclosing the site of Völkner's burial within a chancel at its eastern end. The church has since become a symbol of reconciliation, with tukutuku panels created by Maori parishioners erected in the interior in 1978-1979 and its name changed to Hiona St Stephen's in 1995.

Hiona St Stephen's Church is nationally significant for its association with the events surrounding the death of Carl Völkner, the subsequent military invasion of the eastern Bay of Plenty and the alienation of Whakatohea lands. It has close associations with the activities of the Church Missionary Society, and is one of few remaining CMS churches in New Zealand. The church demonstrates the Maori origins of Opotiki, and is the earliest surviving building in the town. It has been at the heart of religious and community life in the settlement for most of its 140 years, and continues to have important symbolic meanings including that of reconciliation, to both Maori and Pakeha New Zealanders. The church is associated with other activities of significance, including military fortification, imprisonment and public entertainment in Opotiki. The building is an important local landmark, and forms a fundamental part of a well-preserved historical and cultural landscape. The latter encompasses the archaeological remains of both Maori and early colonial settlement, the 1860s town layout, and numerous later nineteenth- and early twentieth-century buildings.