Fanning, who has stealthily crept through the tournament, gained revenge for his Rip Curl Pro final defeat by Parkinson last year.
Fanning had earlier won his quarter-final against giant-killing NSW surfer Kai Otton, who had knocked out world No.1 Taj Burrow earlier in the event.
The Queenslander is aiming to break an 11-year drought at Bells - his only win in the event in 2001.
Four-time women's world champion Stephanie Gilmore produced a perfect 10 scoring ride to win her round four heat and make the quarter-finals.
Gilmore produced a series of amazing turns and awesome power to record the first 10 at the event this year and see off fellow Australian Laura Enever.
The 24-year-old is aiming for her fourth Bells title, and now faces Hawaiian teenager Malia Manuel in the quarter-finals.
Manuel beat Gilmore in round three on Thursday to relegate the world No.1 to Friday's sudden-death heat.
-AAP