Sir Thomas was son and heir of Henry Vaughan of Tretower Court in Brycheiniog (South Wales) by Gwenllian th daughter of William ap Goronwy of Brecon. He softened his patronymic of 'ap Harry' to Parry. The friendship with Sir William Cecil, his kinsman, introduced Thomas to the Court of King Edward VI.

In Queen Mary Tudor's reign, Thomas was one of the protestants who were allowed to attend on the Princess Elizabeth in her confinement at Hatfield House (Hertfordshire) and he became her steward. He was gained over by Lord Seymour of Sudeley to try and advance his ambitions to marry Elizabeth, with whom Thomas was known to be a favourite. His curious confession concerning the proposal, made to Elizabeth, is printed in the 'Burghley State Papers'. Elizabeth, at her accession, rewarded Thomas' services with a knighthood, a seat on her Privy Council and the appointments of Controller of her Household, in November 1558, and of Master of the Court of Wards and Liveries, on 26th April 1559. On 5th January 1559, he was elected MP for Hertfordshire. Sir Thomas acquired the manor of Hamstead Marshall in Berkshire, of which county he became Lord Lieutenant in 1559, and built a fine house  there on the hill overlooking the parish church. Some say it was here that Princess Elizabeth had given birth to Seymour's child in the 1540s. It was pulled down in 1602.

Parry is said to have been the chief promoter of Lord Dudley's proposed marriage with the Queen and, to him, Sir Nicholas Throgmorton, the Ambassador to France, addressed, in November 1560, a vigorous remonstrance on the subject. After reading it, Sir Thomas was not "over-courteous" to the secretary, Jones, who brought it, though he appeared "half ashamed of his doings".

He died on 15th December 1560 of "mere ill-humour," according to popular report, and was buried in Westminster Abbey. He married Anne the daughter of Sir William Reade of Boarstall (Buckinghamshire) and widow, first, of Sir Giles Greville and, secondly, of Sir Adrian Fortescue, by whom he had two sons and two daughters. His heir was his eldest son, Sir Thomas Parry Junior (1541-1616). Lady Parry, who was one of the ladies of the Privy Chamber, was granted, about 1566, an annuity of £50 for thirty-three years. She died on 5th January 1585 and was buried in Welford Church, near Hamstead Marshall, where a fine wall monument to her memory still exists.