In 1952 Jack O'Neill opened the first surf shop in a garage on the Great Highway in San Francisco, a sand dune away from his favorite bodysurfing break. While Dale Velzy, Hobie Alter and others had shops down south, they only sold boards. There O'Neill sold his first wetsuits, a few vests he made from gluing together pieces of neoprene rubber, a material that was then being researched at UC Berkeley for deep sea diving. From the garage he expanded the average surfer's playground to include locations from Steamer Lane to J-Bay, and from Antarctica to reef breaks off the coast of Iceland. O'Neill and his company trademarked the term "surf shop" in 1962, but never enforced their trademark.

Since then, O'Neill has made countless improvements to the design and quality of the wetsuit. From the introduction of the zigzag stitch to the names he originated which became generic, (i.e. spring suit, long john, short john, etc.).

O'Neill's son Pat was a pioneer in developing the leash, at first affectionately known as the "kook cord". Using materials such as nylon lines, suction cups and surgical tubing, Pat found ways to prevent his board from crashing into the cliffs and breaking in half. While testing a leash, founder Jack O'Neill lost an eye and now has to wear an eyepatch. Pat became CEO of the company as of the late 1980s.
The O'Neill brand now branches out to many products. Wetsuits, surfboards, boardbags, swimsuits, clothing, and shoes are some of the products on which O'Neill prints their logo.