O'Connell signed a new two-year contract on 3 January 2012 that would see him continuing to play his rugby for Munster and Ireland until the end of the 2013–14 season. He made his comeback from the knee injury suffered in the 2012 Six Nations against Ulster in the Heineken Cup quarter-final on 8 April 2012. O'Connell suffered another knee injury in Munster's Pro12 league game against Ulster, which ruled him out for 4–6 weeks and made him a doubt for Ireland's 3-Test series against New Zealand in June 2012. Having missed the series, O'Connell declared himself fit in August 2012. He also stood down as Munster squad captain, making way for teammate Doug Howlett on 24 August 2012, having been captain for just over five years. A back injury prolonged O'Connell's injury-enforced absence at the beginning of the 2012–13 season. He made his comeback on 13 October 2012, in Munster's opening fixture of the 2012–13 Heineken Cup away to Racing Métro 92.