O’Neill left Leicester on 1 June 2000, taking over from the team of John Barnes and Kenny Dalglish to become manager of Celtic, who had finished runners-up to Old Firm rivals Rangers in both of their previous seasons; in the season just gone, they had finished 21 points behind the champions.
O’Neill’s first Old Firm game, in late August 2000, ended in a 6-2 victory for Celtic over Rangers. It was their biggest victory over Rangers since the 1957 Scottish League Cup Final. His second Old Firm game saw a reversal of fortunes, however, as Celtic suffered a 5-1 defeat. In that first season, O’Neill won a domestic treble with Celtic, the first time this had been achieved since 1968. He was then touted as a potential successor to Alex Ferguson, who had announced he was to leave Manchester United in 2002. Celtic then retained the league title in 2001-02, the first time since 1982 that Celtic had managed that feat. Celtic also qualified for the Champions League group stage, winning all of their home games but losing all of their away games.
He then guided Celtic to the 2003 UEFA Cup Final in Seville, which Celtic lost 3-2 in extra time to a Porto side managed by José Mourinho. This was Celtic’s first European final since 1970 and they beat Blackburn, Celta Vigo, Stuttgart, Liverpool and Boavista on the way to the final. 80,000 Celtic fans travelled to Seville. The following season Celtic regained the league title from rivals Rangers and reached the quarter finals of the Uefa Cup, including a victory against Barcelona.
On 25 May 2005, Celtic announced that O’Neill would resign as manager to care for his wife Geraldine, who had lymphoma. His last competitive game in charge of Celtic was the Scottish Cup final 1-0 victory over Dundee United on 28 May 2005, decided by an eleventh-minute goal by Alan Thompson.
Under O’Neill, Celtic won 213, drew 29 and lost 40, of 282 games played, and he was the most successful Celtic manager since Jock Stein. In his five seasons at Celtic Park, O’Neill won three League titles, three Scottish Cups, and a League Cup. The two league titles he lost were by margins of a point and a goal. He also oversaw a record 7 consecutive victories in Old Firm derbies, and in season 2003-04 Celtic created a British record of 25 consecutive league victories.