Born in Philadelphia, Pennsylvania, he began drawing for his own amusement as a child. His given name was Frederick Parrish but he later adopted the maiden name of his maternal grandmother, Maxfield, as his middle name. He later adopted Maxfield as his professional name. His father was an engraver and landscape artist, and young Parrish's parents encouraged his talent. He attended Haverford College and the Pennsylvania Academy of the Fine Arts. He entered into an artistic career that lasted for more than half a century, and which helped shape the Golden Age of illustration and the future of American visual arts.

Launched by a commission to illustrate L. Frank Baum's Mother Goose in Prose in 1897, his repertoire included many prestigious projects including Eugene Field's Poems of Childhood (1904) (see illustration) and such traditional works as Arabian Nights (1909). Books illustrated by Parrish are highly sought-after collectors items.

He had numerous commissions from popular magazines in the 1910s and 1920s including Hearst's, Colliers, and Life. He was also a favorite of advertisers, including Wanamaker's, Edison-Mazda Lamps, Fisk Tires, Colgate and Oneida Cutlery. In the 1920s, Parrish turned away from illustration and concentrated on painting for its own sake. Androgynous nudes in fantastical settings were a recurring theme. He continued in this vein for several years, living comfortably off the royalties brought in by the production of posters and calendars featuring his works. An early favorite model was Kitty Owen in the 1920's. Later, another favorite, Susan Lewin posed for many works, and was employed in the Parrish household for many years. Parrish himself posed for many images that featured male figures - and occasionally female ones (see Potpourri, 1905).

In 1931, he declared to the Associated Press, "I'm done with girls on rocks", and opted instead to focus on landscapes. Though never as popular as his earlier works, he profited from them. He would often build models of the landscapes he wished to paint, using various lighting setups before deciding on a preferred view, which he would photograph as a basis for the painting (see for example, The Millpond). He lived near Cornish, New Hampshire and painted until he was 91 years old.