Ó Conaire was born in Galway in 1882. His father was a publican, who owned two premises in the town. His mother was Kate McDonagh.
After the collapse of his business, his father was forced to emigrate to the United States of America, where he died shortly afterwards. Ó Conaire's mother died in 1893, with the result that the orphaned Ó Conaire (and his brothers Isaac and Michael) were sent to live with their uncle Patrick Conroy in Ros Muc. He attended school in Turlach Beag, having previously gone to the Presentation Convent and The 'Bish' in Galway. He subsequently he went to Rockwell College and Blackrock College.
He emigrated to London in 1899 where he got a job with the Board of Education. He became involved in the work of the Gaelic League. A pioneer in the Irish Literary Revival in this century, Ó Conaire and Pádraig Pearse are regarded as being the two most important Irish language short story writers during the first decades of the 20th century.
He was married to Molly Ní Mhanais, with whom he had four children: Eileen (born 22 February 1905), Patrick (born 3 November 1906), Kathleen (born 24 February 1909, and Mary Josephine (28 July 1911–1922) who died of diphtheria.
Ó Conaire returned to Ireland in 1914, leaving his family in London. Living mostly in Galway, he earned a meagre living through writing, teaching at Gaeltacht summer schools, and as an occasional organiser for the Gaelic League.
He died on a visit to Dublin in 1928 after complaining of internal pains while at the head office of the Gaelic League. He was 46.
A statue to his memory was erected in 1935 in the John F. Kennedy Memorial Park in the heart of Galway City, at Eyre Square Eyre Square.