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Across all youth levels, Parejo won 43 caps for Spain and scored nine goals. He made his full debut in 2018, at the age of 28.

Parejo was promoted to the under-21 team the following year, appearing in several qualification matches for the 2009 European Championship. He won his first cap for the senior team on 27 March 2018, replacing Thiago Alcântara late into the 6–1 friendly defeat of Argentina.

Parejo and Paco Alcácer each scored twice in a 5–1 win away to third-place RC Celta de Vigo on 7 November 2015; his first came just before half-time, through a free kick to put the visitors ahead 2–1. However, in January, after a poor run of form, the former was stripped of his captaincy in favour of the latter by manager Gary Neville.

In the following years, Parejo was an undisputed starter for several managers. In 2014–15 he scored a career-best 12 goals, being one of the best scorers in the competition from the midfielder position. In the process, he also became the first Valencia midfielder to score ten or more goals since Vicente in the 2003–04 season.

Parejo was given the squad number 17, which had previously been assigned to Ruud van Nistelrooy, who was also out for several months due to a serious injury. He appeared little during the season, his first match being the 4–0 La Liga away success against Sporting de Gijón on 15 February as he replaced Sergio Ramos for the final ten minutes.

Parejo was quickly deemed surplus to requirements at his new club, his situation not improving even after the serious injury suffered by Sergio Canales, who played in his same position. He bounced back, however, for 2012–13, scoring twice in 36 official games in an eventual fifth-place finish.

After starting out at Real Madrid, he first made a name in La Liga with Getafe. Transferring to Valencia in 2011, he went on to appear in 370 official matches for the latter club and win the 2019 Copa del Rey; he also spent four months in England, with Queens Park Rangers.

On 14 June 2011, Valencia CF signed Parejo for a reported €6 million, with out-of-favour goalkeeper Miguel Ángel Moyá going to Getafe on a year-long loan as part of the deal. He made his league debut on 15 August, playing 80 minutes in a 1–1 away draw to RCD Mallorca.

In late July 2009, as Esteban Granero was re-bought from Getafe CF, Parejo went in the opposite direction with Real, as in Granero's case, having a similar option. On 25 March 2010, he scored against his former club after stealing the ball from goalkeeper Iker Casillas, but the hosts lost it 2–4; having to compete for a starting berth in central midfield with coach Míchel's son, Adrián – a former teammate in Real Madrid B – he nevertheless contributed solidly during the campaign as Getafe qualified for the second time in its history for the UEFA Europa League.

Parejo appeared more in 2010–11 (36 matches), but the Madrid outskirts club only narrowly avoided relegation.

On 4 August 2008, Parejo signed a one-year loan deal with Championship club Queens Park Rangers, and made his debut five days later, coming off the bench in a 2–1 win over Barnsley at Loftus Road, going on to total 18 official appearances. On 17 December, Real Madrid officially recalled the player from his loan effective 1 January 2009, after first-team midfielders Rubén de la Red and Mahamadou Diarra were both out for the campaign with various physical problems.

Parejo was named in the Spanish under-19 squad for the 2007 UEFA European Championship. In the tournament held in Austria, he scored the final winner against Greece (1–0).

Born in Coslada, Community of Madrid, Parejo was a product of Real Madrid's youth academy, joining at the age of 14. He was called on several occasions by first-team coach Bernd Schuster to train with the seniors and, during the 2006–07 season, played four games for Real Madrid Castilla in Segunda División.

Daniel "Dani" Parejo Muñoz (Spanish pronunciation: [daˈnjel ˈdani paˈɾexo] ; born 16 April 1989) is a Spanish professional footballer who plays as a central midfielder for Valencia CF, where he is captain, and the Spanish national team.