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The area was traveled by the early Mormon pioneers on their journey to where they settled and built Salt Lake City. One of their leaders, Parley P. Pratt, explored the canyon in 1848. He was given a charter the following year to build a toll road through it, which was finished in 1849. The basin at the top of the canyon was an ideal place to graze, and a few families settled. Early on, the area was deeded to Samuel Snyder, Heber C. Kimball and Jedediah Grant. The settlers named it "Parley's Park City", which was shortened to "Park City" upon the town's incorporation in 1884. The first known discovery of ore in this area was by men serving under Colonel Patrick E. Connor, who invited his men to prospect in the area after having been relocated from Gold Rush-era California. The finding of silver, gold and lead sparked the first silver mines in Park City in the 1860s. Park City's large mining boom brought large crowds of prospectors setting up camps around the mountain terrain, marking the first mining settlements. Although it was not the first find, the Ontario silver mine, discovered by Herman Buden in 1872 and quickly purchased by George Hearst through his business partner R.C. Chambers, was the first major producer.

Another prominent mining family was that of William Montague Ferry Jr. Ferry Moved to Utah from West Michigan already a very wealthy man. He had previously been a Colonel in the Union Army, mayor of Grand Haven, and was son of wealthy businessman William Montague Ferry. Ferry was followed by a group of other wealthy Michiganders (including his brother Edward Payson Ferry) who came to be the social elites of the town. The Ferry family owned numerous mines including the Marsac Silver mining Company and the Silver King Coalition Mines. Col Ferry also donated the land for Westminster College and unsuccessfully ran for governor of Utah. Edward Ferry's son W. Mont Ferry was mayor of Salt Lake City.

In 1880, a spur line was established to the Echo station of the First Transcontinental Railroad. By 1892 the Silver King Mine and its owners Thomas Kearns and David Keith took the spotlight as one of the most famous silver mines in the world. While silver mines were doing well in Utah, other mines around the world were not doing as well, which drew many of these miners to Park City. The town flourished with crowds of miners and wealth, but by the 1950s, the town nearly became a ghost town. This was due in part to a drop in the price of silver.

The town was nearly destroyed by fire in 1898. Another accident occurred in 1902 when 34 miners were killed in an explosion in the Day West Mine.

The transformation of Park City into a ski destination town is primarily attributed to declining silver and metal prices during and following World War I, the Great Depression, and World War 2. The mining community never fully recovered and so the town turned to skiing. The silver industry was suffering when 'Parkite' miners presented to Utahns Inc. a proposal for a ski resort called Treasure Mountain. United Park City Mines, who owned the land the resort would be built on, received a land-redevelopment grant from the John F. Kennedy Administration. Treasure Mountains (now Park City Mountain Resort) opened in 1963 on 10,000 acres (40 km) of land the miners owned with mineral rights. This is said to be when tourists first largely began to visit Park City. This marks the beginning of the ski industry largely promoted by the Utah State Legislation as a destination resort.

Since the rise of the skiing and tourist economy, Park City houses more tourists than residents. It has become a place of fame through the 2002 Winter Olympic Games and provides more attractions than ever before. In the 1950s, Utah began to use Park City as a mountain getaway, and not until D. James Canon promoted winter sports in Utah, with the promotional scheme of "Ski Utah" and "The Greatest Snow on Earth" did many drive to see the city. Utah drew in over 648,000 tourists in 1970 and now a yearly average of 4 million tourists. In a town with a population of 8,000, the average number of tourists in Park City is 600,000 per year. This significant increase in visitors could be credited to promotional material that is distributed by the Utah Publicity and Tourist Council. Growth has accelerated in the last few decades, and Park City is now one of the most affluent resort towns in the United States.

According to the Bureau of Economic and Business Research, in 2012 travel, tourism and recreation generated $7.4 billion in spending and $960.6 million in state and local tax revenue for the State of Utah. That same year Utah's total gross domestic product was $128 billion, making tourism 5.8% of GDP for the Utah economy as a whole. Park City draws in 3,006,071 average annual visitors; in the winter 1,603,775, and in the summer 1,402,296. Park City benefits from the average nightly visitor spending $100 to $350. Currently, Park City primarily relies on its tourist industry from skiing to restaurants to hiking and biking. The makeover of Park City has stimulated a culture of expenditure, adventure, wealth, and this is included in their promotional material.

To this day, there are still more than 1,000 miles (1,600 km) of old silver-mine workings and tunnels beneath the slopes at Park City Mountain Resort and neighboring Deer Valley. On Main Street, 64 Victorian buildings are listed in the National Register of Historic Places. There are many remaining mine buildings, mine shafts (most blocked off from outsiders with large steel doors), and hoists, including the weathered remains of the California-Comstock and Silver King Mines and the water towers once used to hydrate one of the biggest mines, the Silver King, provide some history of this mining town transformed into a skiing resort.

According to estimates from the U.S. Census Bureau, as of 2016, there were 8,299 full-time residents in Park City. The racial makeup of the county was 78.8% non-Hispanic White, 1.1% Black, 0.1% Native American, 2.2% Asian, and 1.0% from two or more races. 16.8% of the population were Hispanic or Latino of any race.

As of the census of 2010, there were 7,558 people, 2,885 households, and 1,742 families residing in the city. The population density was 430.2 inhabitants per square mile (166.1/km²). There were 9,471 housing units at an average density of 539.1 per square mile (208.1/km). The racial makeup of the city was 81.0% White, 0.6% African American, 0.30% Native American, 2.1% Asian, 0.3% Pacific Islander, 13.5% from other races, and 2.3% from two or more races. Hispanics or Latinos of any race were 24.1% of the population.

There were 2885 households, out of which 26.8% had children under the age of 18 living with them, 48.4% were married couples living together, 7.3% had a female householder with no husband present, 2.6% had a male householder with no wife present, and 39.6% were non-families. Of all households 25.8% were made up of individuals, and 5.0% had someone living alone who was 65 years of age or older. The average household size was 2.6 and the average family size was 3.03.

The age distribution was 23.0% under the age of 20, 7.2% from 20 to 24, 30.7% from 25 to 44, 30.4% from 45 to 64, and 8.5% who were 65 years of age or older. The median age was 37.4 years. For every 100 females, there were 112.3 males. For every 100 females age 18 and over, there were 114.7 males.

As of the census of 2000, the median income for a household in the city was $65,800, and the median income for a family was $77,137. Males had a median income of $40,032 versus $26,341 for females. The per capita income for the city was $45,164. About 5.3% of families and 10.0% of the population were below the poverty line, including 11.6% of those under age 18 and 6.6% of those age 65 or over.