The village of Horley is 5 miles NW of Banbury. The church of St Etheldreda shares the parish with St John the Baptist, Hornton, 3 miles away. Archaeological evidence shows that both churches were in existence by the late 12thc. Built of dressed Hornton ironstone, Horley comprises a chancel, central tower, and a spacious aisled nave. The upper stage of the squat central tower has 12thc. round-headed arches to E and W, housing paired belfry openings separated by a colonnette, the W one bearing a decorated capital. Inside, the arch on which its W wall stands is believed by Sherwood and Pevsner to retain its Romanesque imposts. The nave was rebuilt in the 13thc., and the ground stage tower arches were remodelled to contain tombs in arched recesses on N and S sides. The chancel, thought to have been built at the same time as the tower, remains substantially of the 12thc. A heavy roll moulding acts as a low stringcourse below the Romanesque furnishings in the S and N walls: an aumbry, decorated with a simple roll moulding, and a piscina, decorated with chevron and nailhead. The nave corbels are also probably 12thc., reset, and there is a plain tub font.

The ancient parish of Horley was composed of both Horley and Hornton townships, but in the Domesday Book only Horley is mentioned. The situation of a joint parish with Hornton, three miles away, has pertained from the 12thc. to this day. In 1086 there were two large and two small estates in Horley. One 10-hide estate, held by Berenger de Todeni and of him by Ralph, had been held before the Conquest by Queen Edith and Turgat the law man. The later lay manor of Horley and Hornton was held in the 13thc. by the Bardolf family, forming part of the honor of Brandon. Over-lordship of the two villages may thus have followed the descent of Brandon, which passed from Geoffrey de Clinton to his daughter Lesceline, who in the early 12thc. married Norman de Verdun. In the 1220s Norman de Verdun is recorded as over-lord. In 1115 Henry I granted land in Horley, plus the church of King's Sutton in Northamptonshire held by Ranulph Flambard, to augment the prebend that he and his son held in Lincoln. The churches and tithes of Horley and Hornton were appropriated to this prebend, known as that of Sutton-cum-Buckingham. In 1231 Horley church belonged to the Archdeacon of Buckingham, who held the prebend until the mid-15thc.

The two villages tried to become independent of each other in the 19thc. but division of the parish was so difficult that they have remained as one. The present Ironstone Benefice links Alkerton, Balscote, Drayton, Hanwell, Horley, Hornton, Shenington and Wroxton.

This church shows work of more than one date in the 12thc., well shown in the chancel. The aumbrey is typical of earlier 12thc. work, echoing the roll moulding of the stringcourse. This suggests that Horley was the earlier church to have been built. The piscina, by contrast, shows gaping chevron with lozenges and nailhead characteristic of the late 12thc., and hence added later.

There is no trace of the 12thc. nave except for its corbels and the presence of its original roofline visible on the internal W face of the tower, above the chancel arch. On the ground stage of the tower, on the interior, are round-headed rear arches over wide splays on N and S walls, evidence of original round-headed windows, later replaced by pointed ones.

Both Horley and Hornton have corbels of similar probable Romanesque origin, not mentioned in Sherwood & Pevsner or the church leaflets. One figure in particular, the beast with a nose strap, occurs on beakhead voussoirs on two Oxford churches (St Ebbe's and St Peter-in-the-East, and elsewhere). Horley and Hornton are probably close enough in time for some overlap of craftsmen or motifs to occur.