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The Tottenham midfielder takes the armband after Chelseadefender John Terry was stripped of the role by the Football Association earlier this month.
Pearce is in interim charge of the national side in the wake of Fabio Capello's decision to quit his post as he was unhappy with his employer's decision to remove Terry from the position.
Parker taking the armband marks a remarkable rise for the former Charlton, Chelsea, Newcastle and West Ham midfielder, who has only recently established himself in the England side and has just 10 caps to his name.
The 31-year-old moved to White Hart Lane in the summer following the Hammers' relegation and has proved to be an integral member of Harry Redknapp's squad with his impressive displays in the centre of midfield.
Parker's performances have clearly turned the head of Pearce, with the former England international selecting the holding midfielder ahead of the claims of rival candidates such as Steven Gerrard, Joe Hart, Gareth Barry and James Milner.
Redknapp is widely expected to be named as Capello's long-term successor with the Three Lions,which could see Parker remain as the team's on-field leader for the Euro 2012 finals in Poland and Ukraine this summer.
Pearce hinted that Parker was in the frame earlier in the week, when he admitted that the man voted his country's Player of the Year by the fans had been 'outstanding' for England over the past 12 months.