While at Eton, where he studied composition, he took the bachelor of music degree from Oxford (1867). Among his later teachers, the pianist Edward Dannreuther particularly influenced him.

Parry's Scenes from Prometheus Unbound (1880) was the first of a series of choral works that showed his gift for the massive effects that characterized English music of the rest of the 19th century. Among his works are Blest Pair of Sirens (1887) for chorus and orchestra; the oratorios Judith (1888), Job (1892), and King Saul (1894); and his Songs of Farewell (1916–18). His unison song “Jerusalem” (1916), a setting of words from William Blake's Milton, became almost a second national anthem during and after World War I. His other works include five symphonies, Symphonic Variations, chorale preludes for organ, motets, and many songs.

In 1883 Parry was appointed choragus (festival conductor) of the University of Oxford and joined the staff of the Royal College of Music, London, becoming its director in 1894. In 1900 he became professor of music at Oxford. He was knighted in 1898 and created a baronet in 1903. (He died without sons, and the baronetcy became extinct.) His writings on music include Studies of Great Composers (1886), The Evolution of the Art of Music (1896), Johann Sebastian Bach (1909), and Style in Musical Art (1911).