St. Stephen's was built in 1869 as a school and a church because the population had increased so much around Godstone Station.  It was originally known as Godstone Station School Chapel.  It only had one room with an open fireplace and a harmonium and more land was given by a local landowner to build a playground.  Miss Allan was the first Headmistress and Sargeant Mills, a physical drill instructor, gave children drill occasionally.  Miss Slatter was the last Headmistress who introduced Horlicks malted milk at playtimes costing 3d per week.

By the 1900s the school was seriously overcrowded.  Extra rooms were added in 1905 to create a parish room and cloakrooms.  It could accommodate 100 children and now had 2 classrooms.  The Nave was used as the hall for physical drill and playtime in wet weather.   In fine weather they used a nearby field and on Sports Day all the chairs, tables and sports equipment had to be carried there which meant lifting everything over a stile.  The playground was just mud until the 1950s when tarmac was put down.

Before the 1940s most of the children went home for lunch.  If they lived too far away they brought sandwiches and the school provided hot water for Oxo or Bovril. 

Empire Day was celebrated on 24th May each year.  The children would parade, march past, salute the flag and sing the National Anthem before having a half day holiday.

In 1958 a new school called Lagham School was built in Hunters Chase and Miss Slatter was its first Headmistress.  St. Stephen's Church opened in 1959 when its first service was held on St. Stephen's Day, hence the name. 

The school was renamed St. Stephen's in 1965 when the school badge was introduced.  The design of crossed spurs dates back to a 12th century story when the tenant of Lagham Manor had to pay a pair of gilt spurs as his rent every year.   

Since then the school has grown.  The outdoor swimming pool was opened in 1970.  It was built with the help of funding from the local council and money raised by parents and friends.  The pool was opened in 1970 and cost £2000 to build.  The first resident caretaker was employed in 1973 to improve safety at the school following reports of vandalism at the pool.  As a result, such incidents decreased.  Recent pool renovations including new changing rooms were completed in 2005.

The Infant Department was extended in 2001 when three new classrooms, larger Resource Base and a Medical Room were added.  The outdoor environment continues to be developed with new shelters, shadesails and trim trails being installed, as well as benches, play equipment, a willow walk and vegetable patches.