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During the early part of the 20th century, the Parry Sound area was a popular subject for the many scenic art works of Tom Thomson and members of the Group of Seven. There was a slight decline in economic activity shortly after World War I with J.R. Booth's construction of a rival town, Depot Harbour on nearby Parry Sound Island, but this setback was overcome through later developments in tourism and commerce, and the accidental destruction by fire of the entire town of Depot Harbour on August 14, 1945.
Parry Sound is located along a highway which currently bears the dual designation of Highway 69/Highway 400. From the opening of this freeway alignment in 2004 until October 26, 2010, a point one kilometre north of Parry Sound Bowes Street/McDougall Road interchange was the terminus of Highway 400, but the freeway now begins 17 kilometres further north, at Highway 559 north of Nobel. The former alignment of Highway 69 from Parry Sound southerly to Holmur now has the street name Oastler Park Drive and serves as the main access road to Oastler Lake Provincial Park.