O'Neill was the first of two interim head coaches during a whirlwind two-season leave of absence taken by Lute Olson starting in 2007 and ending in Olson's surprise retirement in October 2008. After Olson had promised former assistant coach Jim Rosborough the head job once he retired, Olson suddenly replaced Rosborough with O'Neill. He was named the interim and had been promised the big chair when Olson's time came, but the latter never materialized despite leading the 'Cats to a 9-2 start in the now-vacated season.
After that, though, the team cratered under O'Neill, losing four of the next six games and dropping to 11-6 on the season. The No. 18-ranked Wildcats were handed a 19-point loss on the road against No. 2 Memphis and dropped to No. 21 before Arizona proceeded to drop back-to-back games to unranked Oregon and Arizona State. A win on the road against Houston wasn't enough to save the 'Cats from dropping out of the AP Poll for the rest of the season, and they went 8-10 in Pac-12 play to finish sixth place in the standings and 19-15 overall.
In the conference tournament, they beat an Oregon State team that went 0-18 in Pac-12 play in the first round before getting bounced by No. 11-ranked and No. 2-seeded Stanford in the quarterfinals. Although O'Neill was able to make it to the NCAA Tournament as a No. 10 seed to keep the now-vacated streak alive, it was a thoroughly underwhelming showing. Arizona surrendered 11 shots from range to West Virginia en route to a 75-65 loss. After the uninspiring performance in conference play and abysmal showings in both tournaments, Olson planned a return for the 2008-09 season. However, after O'Neill had gone public to say that he was still relying on Olson's succession promise, he was not retained on the staff ahead of the 2008-09 season.