In 1768, Captain Cook surveyed the coast of Newfoundland, and on his map Parsons Pond is called Sandy Bay. Rev. Isaac Parsons visited there in his schooner and gave the community its present name.

Today a number of families have the surname Parsons, likely descendants of Bill Parsons formally of Trout River, and his wife, Caroline Francis, who were early settlers there. There are other surnames throughout the town, Parsons, Payne, Keough, Verge, Biggin, Major, Hynes, Caines, Goosney, Gould, House, Blanchard, Shears, Thornhill, Wentzell, Decker, White and Cullihall.

Parsons Pond is a community with an interesting history of oil exploration. Through the 1800's there were several wells and basic refining operations. The original well sites and hardware can still be seen on the western side of Parsons Pond. The provincial energy company, Nalcor, in partnership with others, has purchased the onshore exploration rights. Nalcor began drilling 3 sites in February 2010; results to date were limited and the company is not considering additional drilling at this time. Nalcor is continuing to look at the potential of offshore drilling in the Gulf of St. Lawrence region.

Moulting Pond, a natural body of water situated in the town and provides an ideal swimming area, a great spot for sunbathers, windsurfing and jet skiing. Moulting Pond has a sandy bottom and is shallow enough for learners. It is a real attraction for kids in the summer time, they can be seen spending hours paddling in the water.

Community and business services for Parsons Pond include a K-12 school, Long Range Academy and a public library with public internet access – Community Access Centre (located 16 kms south in Cow Head). A number of fishing enterprises work out of Parsons Pond and their fishing stores/sheds are located in the town's harbour. In addition, recreational services that are available include a ballfield and community trails. Health care is provided in a local medical clinic with hospital services in Norris Point (75 kms south). Other community services include a post office and fire services. Business services include restaurants/coffee shop & take out, ATMs, grocery/convenience stores, beauty salon, and bakery. Additional business services are found in the towns of St. Paul's and Cow Head.

In the summer time the Town Council and the Parsons Pond Recreation Committee always facilitate a great week long festival, "The Parsons Pond Festival". Furthermore, situated just north of Gros Morne National Park, Parsons Pond has significant potential in tourism development. The Town Council and local outfitters are now working with the International Appalachian Tail Newfoundland Labrador Chapter to develop new outdoor products, i.e. wilderness trails, hut to hut hiking and guided adventure tourism packages.