The name Parachinar may derive from a large Chinar tree at a place now encompassed by the headquarters of Kurram Agency. Alternatively, there is in the Kurram Agency a tribe known as the Para-chamkani (Lisyani), which is remembered to have convened meetings under a Chinar tree to resolve their social matters. The previous name, used for Kurram was Tutki, which is still used by some Afghan people. The inhabitants of Tutki were called Tutkiwal.

Parachinar originated as a summer residence for nomadic tribes who wintered their livestock at lower altitudes, and the district had originally been a summer residence for Moghul emperors from Delhi. The Parachinar region was part of Durrani empire before the Second Afghan War of 1878-79, but was not firmly annexed by the British until 1892. During the colonial era and 1947, Parachinar became a hill station for people from Peshawar; as it is relatively cool in the summer and very easy to reach from the plains despite its high altitude since there are no steep ascents on the route from Peshawar.