It was the focus for the royal family's devotion to disembowelled saint, St Erasmus, according to new research.
The building also once contained gruesome images of his martyrdom and even housed one of his teeth, which the abbey is known to have owned.
The Italian bishop, commonly known as St Elmo, would have been tied down alive to a table while his intestines were wound out on a windlass – a rotating cylinder often used on ships. An elaborately carved screen or reredos with a panel, sculptured from alabaster, was positioned behind the altar at the Chapel of St Erasmus.
The 'White Queen' Elizabeth Woodville once worshipped there. Relics are believed to have included a whole, single tooth.
A newly discovered centuries-old royal grant and other ancient documents has revealed the building's historical importance. Co-author Dr Mathew Payne, the abbey's archivist, said: "The White Queen wished to worship there and it appears, also, to be buried there as the grant declares prayers should be sung 'around the tomb of our consort' [Elizabeth Woodville]. The construction, purpose and fate of the St Erasmus chapel, therefore deserves more recognition."
As the wife of Edward of York, Elizabeth Woodville was given the unofficial title of the 'White Queen' – played by Rebecca Ferguson in a BBC drama series of the same name.
It was a name bestowed upon her during 'The Wars of the Roses', which featured some of the bloodiest battles in British history. A white rose was the symbol of the House of York.
Co-author John Goodall, of the Westminster Abbey Fabric Advisory Commission, said: "Very little attention has been paid to this short-lived chapel.
"It receives only passing mention in abbey histories, despite the survival of elements of the reredos. The quality of workmanship on this survival suggestions that investigation of the original chapel is long overdue."
Today only an intricate frame remains. It was demolished in 1502 and little was known about its role. The study helped create a reconstruction of the east end of the church and its furnishes, crafted by illustrator Stephen Conlin. Interment of eight-year-old Anne Mowbray, child bride of Elizabeth's son Richard, Duke of York, confirms its role as a royal burial site.
In the end, Elizabeth's last resting place was next to her beloved husband in Windsor in St George's Chapel, where Queen Elizabeth II and Prince Phillip are now interned. St Erasmus is the the patron saint of sailors and abdominal pain. In life he was responsible for child wellbeing, which prompted the building of the chapel.
The chapel was built on space formerly allotted to a garden, near stalls where the father of printing William Caxton sold his wares. It was commissioned by Elizabeth, Edward IV's commoner wife and Henry VIII's grandmother.
Westminster Abbey visitors can view the remains, including the intricately carved frame, by looking above the entrance to the chapel of Our Lady of the Pew in the north ambulatory. It is believed the reredos was created by an outsider to the Abbey's design tradition.