Millhouses Park stretches along the valley floor of the River Sheaf, sandwiched between Abbeydale Road South and Hutcliffe Wood/Midland Main Line tracks.

Before becoming a park, the area of Millhouses Park was used for farmland and small industrial sites powered by the River Sheaf. The Ecclesall corn mill, dating back to 1299, and the Skargell or Bartin wheel, a cutlers wheel from the early 17th century, are notable historical remnants. The land, known as the Grange Ville Estate, saw ownership disputes throughout the 19th century but ultimately remained with the Earl Fitzwilliam.

In 1907, William Wentworth-Fitzwilliam, 7th Earl Fitzwilliam, donated land to the City of Sheffield, leading to the creation of Millhouses Park. By the 1930s, the park featured a boating lake, swimming pool, paddling pools, cricket pitch, bowling greens, and tennis courts, attracting up to 50,000 visitors on summer weekends by the 1960s.

The 1980s saw the closure of the lido, and the paddling pools were closed in the 1990s due to pollution concerns. In 2010, the Splash Waterplay area opened, revitalizing the old Lido space. Additional improvements included the Park Cafe, a sensory garden, and a 'fish ladder.'

In 2011, the park introduced an outdoor gym and a zipwire in the play area, earning the Green Flag award for its facilities and sustainability. Further developments in 2012 included a children's cycle roadway and the restoration of the mill buildings.