Parakai gets its name from the nearby Kaipara Harbour and Kaipara River. The name, literally translated, is Much-Food.

Parakai was traditionally a summer camp for Iwi as it was a great source of eels, other food and flax. The Hot Springs Reserve was gazetted in 1881 - although at that stage the "springs" were merely a mud hole set among Ti-Tree and scrub.

Proper baths were set up by 1892, and following 40 years of development and construction, Parakai in the mid 1920s was in the midst of a boom, with more visitors on weekends and public holidays than the accommodation could cater for. The natural thermal springs had gained a reputation for relieving many health problems and during the Second World War, the pools became popular with visiting American servicemen.

Amenities in Parakai today include two public hot water pool complexes, a supermarket, primary school and kindergarten. With one large subdivision just completed and others on the drawing board, the population of around 800 is set grow rapidly.