St Andrew's Church in Stockwell, South London, could be revamped into an apartment block after the Church of England revealed it is too expensive to repair.
The building is in need of repairs expected to cost around £4 million.
The church will soon celebrate its 250th anniversary.
The Evening Standard says local residents are urging the Church to protect the building.
Speaking to the paper, Charlene Hutsebaut, chair of the Oak Square Residents' Association said: "The parish was started in 1767 and we are worried about the possibility it will be demolished and replaced with a huge building site.
"We think it is a shame such a beautiful structure and something so old could be torn down."
She went on: "As residents we are extremely worried that we may end up having a massive tower block beside us which will be higher than the current four-storey buildings.
"We understand they need to carry out repairs and modernise it and the church might not have the money to do it.
"But it feels we're caught between a rock and a hard place."
The church is not a listed building.
A spokesperson for the Diocese of Southwark said: "The church and hall at St Andrew, Stockwell, need over £4 million spent on them to make them safe and watertight, but this would not bring them up to modern standards for use by the community.
"The parish has been in close consultation with the local community and whilst there are no finalised plans at present, the Priest-in-Charge hopes to work closely with Lambeth Council to provide a church and community space for all to use.
"The site may include some dwellings which would be in keeping with the rest of the area."
