O'Connor and then wife Angela Shelton conceived a project that would survive their brief marriage. Shelton's memoir of her childhood experiences on the road with her serial-marrying mom resonated with O'Connor, himself the product of a broken home, so the pair co-wrote "Tumbleweeds" (1999, executive produced by Demme), focusing on the period when the pre-teen daughter was on the cusp of young womanhood. Once he saw the Tony-winning British actress Janet McTeer on Charlie Rose's show in 1997, he knew he had found the mother, and he stuck by her, even though it meant funding the shoot himself when potential financiers balked at her anonymity. Despite limited rehearsal time, O'Connor rapidly developed chemistry between mother and daughter (Kimberly J Brown) through improvisational exercises, striving for what he calls a "documentary within the context of drama." The resultant gem of a movie, in which he also co-starred as McTeer's volatile truck-driving boyfriend, won the Filmmaker's Trophy at Sundance and went on to garner several awards for its leading lady. O'Connor and Shelton were also asked to create a potential TV series based on the material.
After executive producing the documentary "Mule Skinner Blues" (2001), the indie drama "The Slaughter Rule" (2002) and the cable actioner "The Smashing Machine" (2002), O'Connor returned behind the camera to direct "Miracle" (2004), the well-crafted Cinderella sports story of the 1980 U.S. Olympic hockey team and its near unimaginable defeat of the then-dominating Soviet and Czech teams. Building the drama on the shoulders of coach Herb Brooks, a complicated, hard-driving man played to perfection by hockey enthusiast Kurt Russell, O'Connor assembled a textbook sports film that rose above others in the genre due to its attention to human moments and character foibles.