The New York School of Art (which eventually became Parsons The New School for Design) established a Handicrafts Department in 1904, which became the Crafts Department the following year. This department continued until 1917. It was revived again in 1979, focusing on three programs: ceramics, fibers, and metals. In 1982, the department name was changed to Design, Craft, and Technology; at this time the metals program was expanded to include jewelry design. The following years brought further name changes: Clay, Fiber, Metal Design Department, 1983; Clay, Metal, Textile Design Department, 1984; and Clay, Metal, Textile, and Product Design Department, 1988. In 1990, the name was simplified to the Product Design Department, with the understanding that this term encompassed various forms of craftsmanship and product construction, namely, clay, furniture, glass, metal, product and textile design.

Since 1979, the Product Design Department and its previous incarnations have emphasized the fundamental importance of combining design theory with practical design knowledge, skill, and technique. Each departmental program offers courses that educate students on historical background, social and cultural perspectives, marketing trends, environmental and ethical practices, and basic business savvy. Emphasis is placed on learning the complete process of designing a product, from preliminary sketching to executing a final prototype. The student is trained in two main design processes: visual communication abilities such as drawing and modelmaking, and hand skills such as operating machinery, using tools, and manipulating materials.

As is the case with other departments at Parsons, the faculty is largely made up of instructors who are practicing professionals in the field. This arrangement gives students the opportunity to learn from accomplished and successful designers, and opens a wide range of prospective contacts for internships and employment. It also allows the department to remain up-to-date on current practices and trends in professional product design.