Lafferty and Smith Colonial Chapel was founded in 1886 as the Santa Rosa Undertaking Parlor by John Wylie and A.E. Chartrand. The firm was then located at 432 Fourth Street in the heart of Santa Rosa. In 1898, Daniel H. Lafferty, a cousin of Mrs. Chartrand, became affiliated with the firm and was made the manager in 1904. Just prior to the Great San Francisco Earthquake of 1906, Daniel Lafferty purchased the firm from Wylie and Chartrand. Following the quake, the firm relocated in a small frame building at Fifth and A Streets, which served as the funeral home until 1910. Due to the need for help at the time of the quake, Wilson C. Smith came from San Francisco to assist Lafferty. The two men found that they worked so well together that Smith became a full partner. The funeral home took the name of Lafferty and Smith Undertakers. On April 1, 1910, Lafferty and Smith moved the business to a permanent downtown location. Since that time, the business community took control of the area.

Wilson Smith died in 1921 and Daniel Lafferty in 1931. At that time, Daniel L. Lafferty, Lafferty's son, took control as owner and operator of the funeral home. In 1948, Lloyd J. Webster joined the firm, and in 1953, he became manager. After ten years of service, Webster purchased the funeral home from Lafferty. In January 1966, Webster moved the funeral home to its present location at 4321 Sonoma Highway. He retained the original name, but added "Colonial Chapel" to reflect the architecture of the new building.