The Confraternity of the Crucifix, so called for its cult of the Cross and of Saints Peter and Paul to whom it was dedicated, has been active in the town of Foligno since 1410 but it was formally established only in 1570. In the 16th century following the Catholic Counter-Reformation, many lay associations called confraternities were formed in many Italian towns; these were supported by wealthy noble or upper middle-class families. The members were dedicated to assisting the weakest people, taking care of the sick, helping with burials for the dead, doing charity for the poor and foreigners, assisting widows and young girls without a dowry. These were only a few of the charitable works they did.
At the end of the 1500s the members of the Foligno chapter of the brotherhood obtained from the Dominican friars the use of a vegetable garden next to the convent in Piazza della Canapa (today St. Domenico), where the current Oratory of the Crucifix (Chapel of the Crucifix) was built between the Palazzo Scafati Candiotti and the church of St Domenico, which is today the municipal auditorium. The valuable, elaborate Baroque forms of the modern church testify to the frequent, generous donations that the Brotherhood must have received over time.
Restructuring interventions on the building can be subdivided into three main phases. The original nucleus was built between 1570 and 1642; of that period, only a portion of the fresco depicting St. Helena and the discovery of the Cross, dated 1626, remains. Work began in 1643 to enlarge the oratory with the building of the wooden ceiling painted in tempera depicting the Risen Christ with Cherubims and Seraphims, and works of the artists Francesco Costantini, Cristoforo Lacchi and Giovanni Battista Michelini. Finally, the third and last phase took place in the early 1700s when the interior decoration project of the church was completed thanks to the works directed by Felice Tucci from Foligno.
The structure and the interior decorations of the oratory were seriously damaged in the earthquake of 1997 and impressive restoration work has been ongoing till recently when it was reopened to the public in 2015.