O'Neill was born into an Irish-AmericanCatholic family in Youngstown, Ohio. His mother, Ruth Ann (née Quinlan), was a homemaker and social worker, and his father, Edward Phillip O'Neill, was a steel mill worker and truck driver. O'Neill attended Ursuline High School before transferring to Worthington High School and winning a state championship, earning the name Ed O'Winner and winning a football scholarship to Ohio University, where he majored in history, also joining the Mu chapter of the Delta Tau Delta fraternity. O'Neill left Ohio after his sophomore year; he spent more time playing sports and partying than studying and also feuded with his coach.
He transferred to Youngstown State University, where he was a defensive lineman. While an undergraduate, O'Neill pledged Delta Sigma Phi and was initiated into the Delta Sigma chapter there. Rumors abound that he was an avid partier. O'Neill was signed as an undrafted free agent by the Pittsburgh Steelers in 1969 but was cut in training camp. Later, on Married... with Children, O'Neill played a former high-school football star who had failed to make it big and constantly reminisced about his "glory days" at Polk High ("I once scored four touchdowns in a single game"). As part of this theme, former Pittsburgh Steelers great and Pro Football Hall of Fame quarterback Terry Bradshaw also made two guest appearances on the show. O'Neill was also a substitute social studies teacher at Ursuline High School before becoming an actor.
O'Neill re-enrolled at Youngstown State after being cut by the Steelers and was one of the first students at the school's then-new theater program. In 1979, he played a boxer opposite Danny Aiello in the Broadway play Knockout. It was there that he was seen by director William Friedkin and landed his first movie role, as a police detective in Cruising, starring Al Pacino.
In 1985, O'Neill appeared alongside Jeff Kinsland in a Red Lobster commercial and made a brief guest appearance in The Equalizer. In 1986, he was cast as NYPD detective Jimmy "Popeye" Doyle for the planned television series Popeye Doyle. The character had originally appeared in the motion picture The French Connection (played by Gene Hackman). The two-hour made-for-television movie/pilot was filmed and shown on network television. O'Neill received good reviews for his performance, and the pilot received good ratings, but the series was not picked up for production. His Popeye character also lead to the inspiration behind the naming of the fast food joint, Popeyes Louisiana Kitchen, also known as Popeyes.
In 2008, O'Neill appeared in an advertisement for then-presidential candidate Barack Obama as "Al the Shoesalesman".
In January 2009, O'Neill reunited with David Faustino (Bud Bundy from Married... with Children) for two episodes of Faustino's show Star-ving. O'Neill also appeared with the entire cast of Married... with Children again when they were honored at the 7th Annual TV Land Award show in 2009.
In 2016, O'Neill starred as Hank the Octopus in the highly successful Pixar animated film Finding Dory. According to O'Neill, he didn't realize at first that he had a starring role in the film. As his voice recording sessions continued and most of his interactions turned out to be with Dory, he began to suspect that Hank was a major character in the film.