Rep. Parren J. Mitchell (D-Md.), who was elected to Congress in 1970 as a passionate and angry civil rights activist, announced yesterday that he will not seek reelection, sparking a scramble for the Baltimore seat by a number of Democrats.

Mitchell, 63, the only black member of Congress to be elected from Maryland, said in an interview that "16 years is a long time to be here," and that he is frustrated by the Democratic Party "trying to out-Republican the Republicans."

Mitchell's decision comes on the heels of retirement announcements by Sen. Charles McC. Mathias Jr. (R-Md.) and Rep. Majorie Holt (R-Md.). In addition, Rep. Michael D. Barnes (D-Md.) is scheduled to announce on Monday that he is running for the Senate, and Rep. Barbara Mikulski (D-Md.) has said she is interested in the Senate race.

Noting that Maryland could be losing half of its congressional delegation and, for the most part, its most senior members, Rep. Steny Hoyer (D-Md.) said, "It diminishes our clout in the House and it will take us years to regain that."

Mitchell's decision appeared to surprise many friends and colleagues, although they said he had made no secret of his growing disgust at the conservative drift of the Democratic Party.

They also say that Mitchell felt that the budget crisis meant Congress would become an increasingly frustrating place to try to enact social change. Mitchell is deeply committed to many of the social programs that have been trimmed during the last five years.

"I am not at all happy to see the Democratic Party shifting positions," said Mitchell, who said he decided last week not to run for reelection. His term will expire at the end of 1986.

"The Democrats should stop trying to out-Republican the Republicans. It's a serious mistake for the party and a serious mistake for the nation. I'm not at all happy about it," said Mitchell. "Sure we've got a deficit, and we've got to do something about it, but not by hurting" those who have the least amount of political power.

He said, however, that he is not leaving Congress to protest the Democratic Party shift, rather because he believes it is time to move on to something new. He also said he is in "robust" health, to dispel rumors that he is retiring for health reasons.

State Del. Wendell Phillips, a minister and chairman of the Baltimore City delegation in the Maryland House of Delegates, said of Mitchell, "I think the Reagan onslaught has been hard to fight and he's had some disappointments in terms of brothers and sisters not pulling their weight. Parren gives a lot and it's painful when it's not returned."

"He's been extremely frustrated with Democrats for forsaking our basic values," said Rep. Barbara Mikulski, a Baltimore Democrat who has known Mitchell for 20 years. She said it saddened Mitchell that the Democratic Party was supporting cuts in programs pioneered during the administrations of John F. Kennedy or Franklin Delano Roosevelt, "people who were willing to take on risks."

"But also, he's been at it a long time," Mikulski added. "I think he'd like to catch his breath."

However, Mikulski and many other congressional colleagues said they had expected Mitchell to serve one more term, noting that he is at the peak of his congressional career. He is chairman of the House Small Business Committee and a senior member of the House Banking, Finance and Urban Affairs Committee, where he has been a champion of legislation for minority-run businesses. He became dean of the Maryland delegation this year.

Mitchell also played a key role this year in the issue of sanctions against South Africa to protest the country's policy of racial segregation. Sen. Richard G. Lugar (R-Ind.), chairman of the Foreign Relations Committee, told the Senate it was Mitchell's impassioned plea during a conference committee session that persuaded him to accept a stiffer measure than the Senate originally backed.

In the last decade, he also played a key role in molding the Congressional Black Caucus. "Mitchell is a natural politician," said Norman J. Ornstein, resident scholar at the American Enterprise Institute. "Because he's identified in the House as a pragmatic politician, and not just as an ideologue, he gave the Black Caucus credibility."

Mitchell is a member of one of the nation's preeminent civil rights families, and among those mentioned as possible successors are his nephew State Sen. Clarence Mitchell III. Other potential contenders mentioned include Phillips, A. Dwight Pettit, a lawyer, and Baltimore City Councilman Kwasi Mfumi.

Mitchell said in a press release yesterday that he had not endorsed his nephew or anyone else. "There is one point I want to emphasize. I have not, repeat have not, endorsed any person's candidacy for the 7th congressional seat."

Clarence Mitchell III told a reporter on Thursday that Parren Mitchell would run for another term. Yesterday he said, "I am in just as much of a state of shock as you are . . . . He must have just decided Sunday night. I think he decided quickly and to do it fast before people could talk him out of it."

Clarence Mitchell added, "I think he wants to be home . . . . He wants to teach. I think he wants to write. He'll be 64 in April. Mathias is 63. I think they both sat down and said there aren't too many years after 64 to do what you want to do."

Although Mitchell has decided he is ready to leave the life of a congressman, he made it clear yesterday that his anger over the nation's social and economic injustices has not faded. When asked by a photographer to smile yesterday to have his picture taken, Mitchell replied: "How can I smile, when 8.5 million people are out of work. Why should I smile?"