Parsons began his motorsport career in the Late Model Series and the NASCAR Goody's Dash Series. When the Late Model Series became the Busch Series in 1982, Parsons joined full-time, driving the No. 28 Skoal Pontiac for car owner Johnny Hayes. He won his first career race at Bristol Motor Speedway in that inaugural Busch campaign and led the championship points early in the season. He also won the pole at two of the last three races of the season and finished fifth in points. The following season he ran a limited schedule of 22 out of 35 races, won four poles and posted twelve top-tens, again finishing fifth in Busch standings.
In 1984, Hayes and Parsons moved to the Cup Series for a partial schedule of twenty-two races. Parsons posted three top-eight finishes and finished second in NASCAR Rookie of the Year balloting behind Rusty Wallace. He ran the full Cup season in 1985 divided between Jackson Bros. Motorsports and Roger Hamby's operation, and despite four top-ten finishes he retired from thirteen races and wound up 21st in points.
In 1987, Parsons secured a full-time Cup ride with the Jackson brothers in the No. 55 Oldsmobile, scoring seven top-tens and a fourteenth-place points finish. The 1988 season proved the high point of his Cup career: Parsons led 52 laps at the Winston 500 and earned his only Cup Series victory that year. He also achieved his career-best points finish of ninth that season.
His Cup career continued into the early 1990s under various arrangements. After beginning 1990 with Morgan-McClure Motorsports he was released after three races, and moved through several teams including Diamond Ridge Motorsports. He returned to Cup competition briefly in 1992 with a tenth-place finish at the Daytona 500 for Melling Racing, and in 1993 drove the No. 41 Chevrolet for Larry Hedrick Motorsports before being released late in the year. His final Cup start came in 1997 at Darlington as a substitute for Joe Nemechek, who was on bereavement leave following his brother John's death at Homestead.
From 1994 onward Parsons refocused on the Busch Series, often in cars co-owned with his wife Marcia. He won his second and final Busch Series race in 1994 at the Champion 300. Running full-time in 1995 with the No. 99 Luxaire Chevrolet for J&J Racing, he posted nine top-tens and finished eighth in points. He ran competitively through the late 1990s, at various points achieving a best of sixth in points. His last NASCAR start came at Kentucky Speedway in 2001, where he started fifth before a late-race wreck ended his day 34th.
After retiring from competition, Parsons provided color commentary for the Mizlou Television Network, then joined the DirecTV NASCAR Hot Pass as an analyst during Sprint Cup races. He became a regular color analyst for FS1 covering the NASCAR Craftsman Truck Series and later the ARCA Menards Series. In 2007, he served as the starter for the Daytona 500, waving the green flag. In 2008, Parsons became a part-owner in a Nationwide Series team, Phil Parsons Racing.
Parsons represents a transitional figure in NASCAR's evolution — a driver skilled enough to win at Bristol in the Busch Series' first season and to claim a Cup victory in 1988, yet one who spent much of his career navigating underfunded operations and changing team situations. His longevity in the sport, both as a driver and later as a broadcaster, reflects a deep connection to NASCAR's regional short-track roots.