Margaret Cunningham Parsons, 54, a research analyst in the rehabilitation services administration of the Department of Health, Education, and Welfare, died of cancer Wednesday at Sibley Memorial Hospital.

A paraplegic since she was injured in an automobile accident in 1941, shortly after graduating from high school. Mrs. Parsons had worked in the field of rehabilitation of the physically handicapped for nearly 25 years.

She had been with HEW since 1965, and from 1976 through 1977 was detailed to the staff of the White House Conference on Handicapped Individuals.

Last month, Mrs. Parson received HEW's Superior Service Award for her special efforts as a key staff member of the conference. She also had been elected recently as permanent chairperson of the HEW Advisory Committee on Handicapped Employees.

Born in Greensboro, N.C., Mrs. Parsons graduated from high school there. She later studied at New York University, the New School for Social Research and the University of California's Washington Public Affairs Center.

She worked for what is now the Institute of Rehabilitation Medicine in New York City from 1948 to 1959, becoming administrative assistand and supervising the nonprofessional staff.

From 1960 to 1963, she was administrative secretary to the West African regional representative of the Ford Foundation in Lagos, Nigeria.

Mrs. Parsons had served on panels of the President's Committee for the Employment of the Handicapped. She was a member of the National Paraplgia Foundation and the National Rehabilitation Association.

She is survived by her husband, Arch Parsons, of the home in Washington, and a brother, Decatur C. Cunningham, of Greensboro.

The family suggests that expressions of sympathy may be in the for of contributions to the Margaret Cunningham Parsons Fund, in care of Dr. Howard Rusk at the Institute of Rehabilitation Medicine in New York.