While indoor and outdoor fireplaces certainly look very much alike, there are some important differences between them. The major difference is that an outdoor fireplace does not require a damper, as heat loss is not a concern when it is not in operation. The bottom end of the chimney always remains open to the firebox. Construction of such a fireplace is therefore much simpler, however, it is open to the elements. This might lead to the accumulation of rain and snow in the chimney and in the firebox. Therefore, the hearth of a correctly built fireplace should be sloping slightly outward to let the water run off.

Custom-built stone and brick outdoor fireplaces usually are larger than their indoor counterparts and their fireboxes are more voluminous. Due to the larger spaces and the open sky, a standard-size indoor fireplace would look too small outside.

The firebox opening of outdoor fireplaces is usually raised about 50 cm (1 1/2 ft.) above the terrace level. There is no functional reason for doing so, it is a design decision that allows an almost eye-level view of the flames. On a stone or brick terrace, a hearth extension is not required, but may be useful for propping up your feet or warming liquids. Two other accessories that should be considered when planning an outdoor fireplace are storage space for logs, kindling and fireplace tools as well as a screen to shield the flames from wind and the outside from shooting sparks.

Compared to the large number of available options for indoor fireplaces, their outdoor counterparts are mostly built out of stones and bricks to withstand rain and temperature changes. They can have a solid core made of concrete, which is clad with additional stone, tile, stucco, brick or metal, or they are built out of individual stones which are mortared in place. Nowadays, there are several prefabricated fireplace models available from manufacturers for outdoor use, although they usually are not as weatherproof as a masonry model. This makes them suited mostly for warmer climates. These fireplaces are available both as wood- and as gas-burning models. Wooden mantelpieces are very uncommon outdoors due to their constant exposure to the elements.

Finally, chimney caps are a very useful accessory for an outdoors construction, as they function as spark arresters on windy days. Depending on the dryness of your immediate surroundings, this may be extremely important to avoid accidental fires. The chimney caps will not keep animals out of the fireplace, however, as the hearth will always be accessible from below.