O'Halloran was born in India, the second of eight sons of Major-General Sir Joseph O'Halloran .
He entered the Royal Military College, Sandhurst in 1808 and at 16 he was commissioned into the 17th Foot and sailed for India. He was promoted Lieutenant in 1817 and transferred to the 99th Foot as a Captain in 1827. He returned to England after twenty years in India in 1834. Soon afterwards he transferred to the Coldstream Guards and was on half pay until he transferred again to the 97th Foot in May 1837.
Next year he sold his commission and migrated with his family to the new colony from India and established a farm, Lizard Lodge in the Adelaide suburb which now bears his name, O'Halloran Hill. He is buried at Christ Church, an Anglican church which he helped to establish and is also located in the suburb, now overlooking Glenthorne CSIRO Research station.
.On 22 August, 1840, after several days of interviews, investigations and a drumhead court-martial, two Ngarrindjeri men were publicly hung in front of 65 people from their tribe. O'Halloran then told the people (through an interpreter) that their bodies were not to be taken down and that this was to be a warning against violence towards Europeans by Aboriginal people .
This was one of the most contentious incidents in South Australian legal history. At the time, Aboriginals in South Australia were considered British subjects, and therefore deemed to be under the protection of British law. Gawler's ordering of a drumhead court-martial and the executions was not well received by the London authorities and contributed to his removal as Governor.