In 1921 O’Neill graduated from the Coast Guard Academy after a three-year shortened course resulting from World War I. In the 1920s he served in several cutters during the anti-rumrunner patrols of the Prohibition era: the USCGC Gresham (WPG-85), Haida (WPG-45), Algonquin (WPG-75), and Mojave (WPG-47). In 1925-27 he was executive officer and later commanding officer of the destroyer USCGD Ericsson (CG-5). He served on the staff of the Coast Guard Academy from 1927 to 1930, had brief duty in other destroyers in the early 1930s, and commanded the USCGC Apache, 1933-35. O’Neill had a long stretch in Coast Guard Headquarters in Washington from 1935 to 1942, during which time he helped establish the Coast Guard Reserve and Coast Guard Auxiliary. He commanded the Navy attack transport USS Leonard Wood (AP-25/APA-12) from 1942 to 1944, during World War II amphibious operations. After that he headed the Baltimore subsection of the Fifth Coast Guard District and then commanded the entire Fifth Coast Guard District. O’Neill served 1946-49 as Assistant Commandant of the Coast Guard, and from 1950 to 1954 he was the seventh Commandant of the Coast Guard.