O'Brien was born in Oakland, California. He was a cartoonist for the San Francisco Daily News, and a professional marble sculptor before he began working in film. He was hired by the Edison Company to produce several short films with a prehistoric theme, most notably The Dinosaur and the Missing Link: A Prehistoric Tragedy (1915) and the nineteen minute long The Ghost of Slumber Mountain (1918), the later of which helping to secure his position on The Lost World. For his early, short films O'Brien created his own characters out of clay, although for much of his feature career he would employ Richard and Marcel Delgado to create much more detailed stop-motion models (based on O'Brien's designs) with rubber skin built up over complex, articulated metal armatures.
O'Brien's first Hollywood feature was The Lost World (1925). Although his 1931 film Creation was never completed, it led to his most famous work, animating the dinosaurs and the famous giant ape in King Kong (1933), and its sequel Son of Kong (1933). The film Mighty Joe Young (1949), on which O'Brien is credited as Technical Creator, won an Academy Award for Best Visual Effects in 1950. Credit for the award went to the films producers, RKO Productions, but O'Brien was also awarded a statue. O'Brien's protege (and successor), Ray Harryhausen, worked alongside O'Brien on this film, and by some accounts Harryhausen did the majority of the animation. Although O'Brien is widely hailed as animation pioneer, in his later career he struggled for years to find work; shortly before his death he animated a brief scene in It's a Mad, Mad, Mad, Mad World (1963), featuring some characters dangling from a fire escape and was one of the writers for Ishiro Honda's King Kong vs. Godzilla. The 1969 film The Valley of Gwangi, completed by Harryhausen seven years after O'Brien's death, was based on an idea he'd spent years trying to bring to the screen.
O'Brien was married to Hazel Ruth Collette in 1925 and divorced by 1930. He had two sons from the marriage, but, in 1933, Hazel shot and killed the two boys and turned the gun on herself. She survived but died soon after suffering from cancer and tuberculosis.
O'Brien died in Los Angeles. He was survived by his second wife, Darlyne. During his lifetime, O'Brien was never interviewed in depth about his career or methods. In 1997, he was posthumously awarded the Winsor McCay Award by Asifa-Hollywood, the United States chapter of the International Animated Film Society ASIFA (Association internationale du film d'animation). The award is in recognition of lifetime or career contributions to the art of animation.