Hosts South Africa drop striker McCarthy
The decision to ditch McCarthy was a major surprise but follows criticism concerning the forward's fitness. Parreira also dropped defender Bryce Moon and goalkeeper Rowen Fernandez in two other surprise cuts.
Parreira sympathised with the players cut from the squad and thanked them for their commitment.
"My heart bleeds for them," he told a news conference in Johannesburg.
"Put your heads up. Life goes on. We are only allowed to take 23 but thank you very much for your efforts, your attitude and commitment. A team is when somebody shares the same vision, whether you are playing or on the bench."
McCarthy's omission effectively brings down the curtain on a turbulent international career in which he won 79 caps and netted a record 31 goals.
McCarthy played at the 1998 and 2002 World Cup finals but had a stormy relationship with the national side, twice retiring from international football when it conflicted with his club career in Europe, making him a deeply divisive figure in South Africa.
A recent knee injury saw McCarthy play little for English club side West Ham this year and he was criticised when he joined up with the preliminary World Cup squad for being overweight and out of condition.
Goalkeepers: Moeneeb Josephs (Orlando Pirates), Itumeleng Khune (Kaizer Chiefs), Shu-Aib Walters (Maritzburg United)
Defenders: Matthew Booth, Siboniso Gaxa (both Mamelodi Sundowns), Bongani Khumalo (SuperSport United), Tsepo Masilela (Maccabi Haifa), Aaron Mokoena (Portsmouth), Anele Ngcongoa (Racing Genk), Siyabonga Sangweni (Lamontville Golden Arrows), Lucas Thwala (Orlando Pirates).
Midfielders: Lance Davids (Ajax Cape Town), Kagisho Dikgacoi (Fulham), Thanduyise Khuboni (Lamontville Golden Arrows), Reneilwe Letsholonyane (Kaizer Chiefs), Teko Modise (Orlando Pirates), Surprise Moriri (Mamelodi Sundowns), Steven Pienaar (Everton), MacBeth Sibaya (Rubin Kazan), Siphiwe Tshabalala (Kaizer Chiefs).
Forwards: Katlego Mphela (Mamelodi Sundowns), Siyabonga Nomvete (Moroka Swallows), Bernard Parker (FC Twente).