Little is known of his parents before their death, but Guybrush commented in the Bloody Lip that his mother encouraged him to practice playing piano but he neglected to do so. According to his remarks in his hallucination, they either died when Guybrush was young or just abandoned him; when he asks "Where do babies come from", LeChuck answers "In your case, the orphanage".
On Booty Island while attempting to climb the Big Tree, Guybrush fell unconscious. In what seemed to be a hallucination, his parents appeared, Guybrush accused them for abandoning him, and then transformed into skeletons and sang The Bone's Song. The song turned out to be coded information on how to safely get through the many corridors of LeChuck's Fortress.
In the Tunnels Under Dinky Island, Guybrush identifies two skeletons as the remains of his parents, apparently having died while waiting in a first aid room, and salvages his dad's skull in order to make LeChuck's Voodoo Doll.