O'Connell studied at St. Patrick's College, Maynooth and was ordained to the priesthood on May 21, 1842. O'Connell, who had been a seminary professor in All Hallows College, Dublin, Ireland, was named Vicar Apostolic of Marysville, California and titular bishop of Flaviopolis on September 26, 1860 by Pope Pius IX.
O'Connell was ordained as a bishop on February 3, 1861 by Cardinal Paul Cullen. On February 3, 1868, O'Connell was named the first bishop of the Grass Valley Diocese. While the diocese was erected in Grass Valley, O'Connell chose to live in Marysville. He served as a Council Father to the First Vatican Council convoked by Pope Pius IX. He was instrumental in choosing then Father Patrick Manogue to start a ministry in the Nevada Territory. Along with Manogue, O'Connell encouraged the Daughters of Charity to help in Nevada. He dedicated Saint Mary in the Mountains Catholic Church in 1864.
O'Connell resigned on March 17, 1884. On that date, he was appointed as titular bishop of Ioppe. He died in Los Angeles, California on December 4, 1891.
The remains of Eugene O'Connell were moved from Los Angeles to Sacramento over a hundred years after his death.