A regional service centre for southern Cumberland County, the community is also known for its port on the Minas Basin, the Ship's Company Theatre productions, and the Fundy Geological Museum.

Before the arrival of European settlers, Parrsboro was a portage point for Mikmaq travellers along the Minas Basin and Cumberland County river systems.

[3] The centre of settlement gradually shifted from Partridge Island to the sheltered estuary of the Parrsboro River where a harbour and surrounding mills grew.

The settlement, at first named Mill Village, was renamed Parrsboro in honour of Nova Scotia Governor John Parr in 1784, and the town was incorporated on July 15, 1889.

The town became a port of registry in 1850 for over 115 locally built schooners as well as giant square riggers, culminating in the largest, the ship Glooscap in 1891.

The 13th and final vessel in this service, operated by the Dominion Atlantic Railway, was the MV Kipawo, which is now permanently beached at Parrsboro and incorporated into the Ship's Company Theatre performance centre.

The building stood empty for decades, but was acquired in 2011 by Harvey Lev, a Montreal businessman with interests in heritage real estate.

It provides spaces for a variety of activities including art exhibits, conferences, workshops, poetry readings and a café.

The decline of wooden shipbuilding in the late 19th century dealt a severe blow to the local economy, along with neighbouring communities such as Port Greville and Shulie.

These changes contributed to an economic decline in Parrsboro in the latter half of the 20th century after some businesses, such as the O'Regan's garage and car dealership, moved to larger population centres.

[27] A number of businesses have remained consistent and sustainable in Parrsboro, owing to the community's central location along the north shore of the Minas Basin.

There is a number of small coastal fishing operations in the area and the community is also the base of operations for several large blueberry harvesting companies, as well as being home to Granby Furnaces, a firm which has found a success in producing home heating appliances (oil furnaces, cast boilers, heat exchangers, etc) for export.

Small businesses in or near Parrsboro include the Crossroads Co-op supermarket, a Tim Hortons franchise, Harrison’s Home Hardware, an Irving Oil gas station, a convenience store, an art gallery called The Destination Gallery, a nine-hole golf course, a skating arena, a bottle depot, and a restaurant/tavern.