O'Day was born in Chicago, Illinois, one of six children of two deaf parents. He made his debut as a major league player with the Toledo Blue Stockings in 1884, and in his seven-year career he posted a record of 73-110. After stops with the Pittsburgh Alleghenys (1885), Washington Nationals (1886-89) and New York Giants (1889), he blossomed with two strong wins in the 1889 World Series, then enjoyed his best season by going 22-13 in his final year with the New York Giants in the Players League. However, he developed arm trouble as a result of pitching over 300 innings that year, and ended his playing career in the minor leagues in 1893.

Soon afterward, however, O'Day returned to the NL as an umpire, and he eventually developed a reputation as the finest official in the league. He umpired in 10 World Series - a total exceeded only by the 18 worked by Bill Klem, whose hiring O'Day had recommended - including four of the first five played; for the first three, he was the only NL umpire for the Series: 1903, 1905, 1907, 1908, 1910, 1916, 1918, 1920, 1923 and 1926.

On September 23, 1908, O'Day was involved in the most controversial field decision in major league history. He was working as the plate umpire in the game between the Cubs and the Giants, which ended when Al Bridwell's single drove in the apparent winning run. However, baserunner Fred Merkle never advanced from first base to second, in keeping with the common practice of the era. When the Cubs produced a ball - not necessarily the game ball, which had been thrown into the stands - and claimed a force play at second base, which would negate the run, the debate erupted. Base umpire Bob Emslie had been watching the play at first base to verify that the batter had reached base, but had not seen the play at second. Only later that evening did O'Day rule that the force play had been valid and that the run did not count, causing the game to end in a tie; the league president upheld his decision, and the Cubs overtook New York to win the pennant by a single game.

O'Day called balls and strikes for no-hitters in four decades, a distinction which has been matched only by Harry Wendelstedt. During the 1920 World Series, O'Day was the second base umpire when Bill Wambsganss executed the only unassisted triple play in Series history.

In 1912, O'Day agreed to become the manager of the Cincinnati Reds, who he guided to a 75-78 record. After returning to umpiring in 1913, he managed the Cubs to a 78-76 finish in 1914, and then went back to umpiring for good. Both teams which he managed finished in fourth place. He retired following the 1927 season and became the NL's scout for new umpires.

O'Day began his career in an era during which only one umpire worked in most games, and he spent the remainder in a time when only two were used. In addition, this period witnessed constant violence against umpires, from both players and spectators. To deal with the resulting solitary life of his profession, O'Day chose to live an intensely private life, avoiding the hangers-on who habituated the major league hotels and travel routes, and assiduously maintaining a taciturn aloofness from those who demonstrated an eagerness to get to know him. He did, however, develop a lasting friendship with fellow umpire Emslie, one of his pitching opponents in the 1880s, after both had been in the league for a number of years; he also enjoyed long friendships with John Heydler, who had been a fellow umpire in the 1890s and later became O'Day's supervisor as NL president, and Connie Mack, who had been O'Day's catcher for 3 years in Washington.

Projecting a grim and forbidding demeanor to most observers throughout his career, he was nonetheless quite moved by the expressions of affection he received following an appendectomy in 1926; individuals throughout the game who regarded him as unapproachable, and perhaps somewhat grouchy, had come to revere his great reputation for integrity and ethics, and his unwavering insistence that the rules must be honored in both letter and spirit.

O'Day died of bronchial pneumonia at age 72 in Chicago, and was buried in Calvary Cemetery.