The early history of the Gwoździec synagogue is unknown. Portions of the structure may have been built circa 1650. Between 1700 and 1731, the major portion of the synagogue to survive into the 20th century was built. In 1731, the painting of the wooden cupola ceiling was completed. The centerpiece of this construction project was the reconfiguration of the prayer hall ceiling, which was once a low barrel vault similar to the ceiling in the Zabłudów synagogue. The newly renovated ceiling was a towering tent- like wooden cupola, inspired by the Tent of the Tabernacle, with a curving, undulating surface in a Baroque style. This wooden cupola was probably the first of its kind to be built in the region.
The elaborately painted ceiling was completely covered with Hebrew inscriptions and vibrant animal figures set against a dense vegetative background. A palate of deep, intense colors saturated the prayer hall. When compared to the drabness of daily life, the experience of entering the intensely colored interior of a painted synagogue must have been exhilarating. Indeed, artists and architectural historians recognized the unique value of these historic buildings and documented them during the late 19th and early 20th centuries.