The population of the Texas city is about 2.2 million.
According to local election data, 53-year-old Parker won 53 per cent of the vote defeating Gene Locke, a diplomat.
Parker and Locke competed in the runoff after winning more votes than two other candidates in the Nov 3 election.
"... the voters of Houston have opened the door to history," Parker said after her win, flanked by her partner of 19 years, Kathy Hubbard, and their three adopted children.
"I acknowledge that. I embrace that. I know what this win means to many of us who never thought we could achieve high office," she was quoted as saying by 'The New York Times'.
Parker has worked in the Houston city administration for the past 11 years, first on the city council, and for the past five years as city controller.
She spent 20 years in the oil and gas industry before entering public service.