The church building at Baugh, on the southern coast of Tiree, caught fire at around 03:00 on Boxing Day.
An emergency crew from Tiree community fire station attended along with local police. There were no reported injuries.
Tiree Baptist Church minister, Ruth Kelso, said the community was "sad and shocked to wake up to the news".
In a statement, she added: "Our lovely wee Baugh Church building had burnt down in the night.
"The building may be gone, but our church is still very much alive and we trust God for our future."
Tiree, in the Inner Hebrides off Scotland's west coast, is home about 700 people.
Police Scotland said inquiries were ongoing to establish the cause of the fire.