The Parish Council was formed on 1 April, 1985,  and held its first meeting on Thursday, 28 April 1985, with seven Parish Councillors:-  John Martin, Chairman, Audrey Wilson, Vice-Chairman, Raymond Butler, Mary Hooper, Frances Snee, Wendy Sunney who also acted as clerk and Betty Voelkel who also acted as treasurer for the first year to cut expenses.

Prior to 1985, Osgodby had been divided administratively by Osgodby Lane, the southern half of the village was in the Rural District Parish of Cayton and the northern half was unparished in the Borough of Scarborough. In fact, Bulmer's History, Topography and Directory of North Yorkshire, Part II, 1890, states that "Osgodby, containing 1375 acres, and formerly a separate township, was amalgamated with Cayton in 1886 by a Local Government Order".

Under a Boundary Commission review in 1979, Osgodby Community Association made strong representations to end this unsatisfactory division with the creation of a separate Parish of Osgodby enabling residents to work together with parish status to determine local priorities themselves. Eventually, after much debate, the association was successful.