The Rain Parade were part of the Paisley Underground scene that emerged in the West Coast during the mid-eighties and also included groups like The Dream Syndicate.

The band was founded by college roommates Matt Piucci (guitar, vocals) and David Roback (lead guitar, vocals) in 1981, originally as The Sidewalks. David's brother Steven Roback (bass, vocals) joined the band shortly thereafter. David and Steven had been in a band called The Unconscious with neighbor Susanna Hoffs (who went on to lead the most famous of the Paisley Underground bands, The Bangles.) The band soon added Will Glenn (keyboards and violin) and later Eddie Kalwa (drums). They self-released their debut single, "What She's Done to Your Mind" on their Llama label in 1982.

David Roback left to form a new band, Opal, the rest of the band continuing to record as a four piece, releasing the mini-LP, Explosions in the Glass Palace in 1984. After a single, "You Are My Friend", Kalwa left, his replacement being Mark Marcum, and John Thoman (guitar, vocals) was added to the line-up. The band signed to Island Records, and a live album (Beyond The Sunset) recorded in Japan, and a third album, Crashing Dream, came out in 1985.

The band split in 1986, with Piucci going on to release the LP Gone Fishin' with Tim Lee, and later joining Crazy Horse. The band reformed in 1988 to finish off a double album they had started, but it was never released. The rest of the band formed Viva Saturn. After making the album Rainy Day featuring cover versions performed by various leading lights of the Paisley Underground, David Roback formed Opal, and later Mazzy Star.