The O'Neill gang was first founded in the late 1800s by Irish immigrant Jimmy O'Neill. During the early days, the gang was one of the most powerful gangs in Empire Bay. They control the Irish-American neighborhoods of Dipton and Kingston in the northwest part of the city.
Years later the gang's leadership was succeeded by Jimmy O'Neill's grandson, Brian O'Neill. In February of 1945, the gang went to rob a jewelry store, but when they arrived they discovered it was already being robbed by two associates of the Clemente Crime Family, Vito Scaletta and Joe Barbaro.
As they two groups fought, the police arrived, and while Vito and Joe got away, Brian and his gang were arrested and took the blame for the heist, resulting in them being convicted and sent to Hartmann Federal Penitentiary.
While in prison, Brian encountered Vito and blamed him for being there, and then the two fought in the prison yard, getting them both thrown in the hole. Shortly after that Leo Galante decided to retaliate against the Irish for jumping Pepé Costa and breaking his arm. Pepé arranged for Brian to be alone in the prison gym and sent Vito in to teach him a lesson. During the fight Brian pulled a knife and tried to attack Vito, but Vito overpowered Brian and slit his throat with it.
After Brian's death in prison, the role of leadership was given to his cousin Mickey Desmond. However, many gang members began to conspire against Mickey, thinking he wasn't a fit leader. Mickey responded by leading an attack on Vito and burning down his house as revenge for Brian's death and to hopefully boost his reputation. The attack failed to kill Vito, and in retaliation he and Joe decided to attack Mickey and the O'Neill gang at their hangout, the Hill of Tara bar.