The first European settler in the Parksville area was John Hirst, who pre-empted 120 hectares (1.2 km² or 300 acres) of land on both sides of the Englishman River in 1873. Parksville was named after the area's first postmaster, Nelson Park, in 1877. The Village of Parksville was incorporated June 19, 1945. Parksville became a town on April 1, 1978, and a city on June 1, 1981.
Much of the city's economy is tourism. Two gently sloping sandy beaches, Parksville Beach and Rathtrevor Beach (part of Rathtrevor Beach Provincial Park), have been the town's main attractions. Other important industries are fishing, forestry, and service enterprises.
Parksville's best-known annual event, since 1982, is a sandcastle-building competition in the summer.
A recent movement exists to call the area of Parksville, Qualicum Beach, and nearby communities "Oceanside".