O'Neill was born into an Irish Catholic 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 and won a football scholarship to Ohio University, where he majored in history also having joined 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, Ed pledged Delta Sigma Phi and was initiated into the Delta Sigma Chapter there. Rumor has it that he was quite the partier. O'Neill was signed 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 hall of fame quarterback Terry Bradshaw also made two guest appearances on the show. O'Neill was also a social studies teacher at Ursuline High School, before becoming an actor.
O'Neill re-enrolled at YSU after being cut by the Pittsburgh Steelers and was one of the first students at the school's then new theatre program. He played Lennie in a stage production of John Steinbeck's Of Mice and Men at the American Repertory Theater in Cambridge, Massachusetts. 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 the character of NYPD Police Detective Jimmy "Popeye" Doyle for the planned television series Popeye Doyle. The Popeye Doyle character 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.
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.
Since 1986, O'Neill has been married to actress Catherine Rusoff, who appeared in two episodes of Married... with Children. In 1989, the couple separated but reconciled in 1993. They have two daughters: Claire, born in 1996, and Sophia, born in 1999. The couple currently lives in Los Angeles.