Born to Irish immigrants in Minooka, Pennsylvania (now a part of Scranton), O'Neill was one of four brothers who escaped a life in the coal mines by playing in the major leagues. Other notable members of the O'Neill family were Jack, a catcher in the National League (1902–06); Mike, a right-handed pitcher in the NL (1901–04, 1907); and Jim, an infielder with the American LeagueWashington Senators (1920, 1923). Baseball historian William C. Kashatus noted that Michael and Jack "would become the first brother battery in major league history". The O'Neill brothers "were known to exchange their signals in Gaelic in order to fool the opposing coaches". Later, two of Steve O'Neill's daughters married professional baseball players, one of whom was Skeeter Webb, who worked for O'Neill when he managed the Detroit Tigers during the 1940s.
Steve had by far the most successful playing career of the O'Neill brothers, serving as a catcher for 17 years in the American League. He played with the Cleveland Indians (1911–23), Boston Red Sox (1924), New York Yankees (1925), and St. Louis Browns (1927–28). His playing career curtailed by an injury sustained in a car accident, O'Neill compiled a batting average of .263 in 1,586 games, and, in his only World Series appearance in 1920, hit .333 in seven games as the backstop for the world champion Indians.
When his playing career ended, O'Neill turned to managing and gained a reputation for cultivating talented young players, some of whom went on to become Hall of Famers. He managed the Toronto Maple Leafs of the International League from 1929 to 1931. As a major league manager with four teams—the Indians (1935–37), Detroit Tigers (1943–48), Red Sox (1950–51) and Philadelphia Phillies (1952–54)—O'Neill never had a losing record. His Tigers won the 1945 World Series (when they defeated the Chicago Cubs in the Cubs' last Fall Classic appearance) and O'Neill was known for turning around under-performing teams, often in mid-season. His career winning percentage over 14 seasons was a stalwart .559 (1,040 victories against 821 lost). He also served as a coach for Cleveland, Detroit and Boston. Legendary players who benefited from O'Neill's guidance included Lou Boudreau, Bob Feller, Hal Newhouser, and Robin Roberts. O'Neill was inducted into the International League Hall of Fame.