St Nicholas Chapel was declared in 1693 to serve as a Parish Church for renewable definite periods with its jurisdiction limited to the Fort before its construction was even started. It continued to enjoy this status until 1898 when Kalkara became a parish. Built and financed by Commandatore Francesco Ricasoli in 1696, the chapel was placed to the right of the main gate of the fort in which it was housed. However the chapel was later relocated to its present site – left of the gate and in a more central part of the fort’s courtyard. In 1698 the chapel was dedicated to St Nicholas, Bishop of Bair in memory of Grandmaster Nicola Cotoner. Containing five altars, the Chapel of St Nicholas was adorned with various relics, icons brought from Rhodes, paintings by Mattia Preti, and furniture and ornaments including silverware and vestments donated by various devotees. Various papal privileges were later bestowed upon it in 1770.

The Parish Priest of the fort had to be a Chaplain of the Order and this led to a decade-long dispute between the local Church authorities and the Order over the chapel’s ecclesiastical jurisdiction.