On July 29, 1853, O'Connor was appointed the first Bishop of the newly erected Diocese of Erie by Pope Pius IX. The dividing line of the new diocese ran east and west along the northern boundaries of Cambria, Indiana, Armstrong, Butler, and Lawrence Counties, giving thirteen northern counties to the Diocese of Erie and fifteen to the Diocese of Pittsburgh. Father Joshua Maria Young was named his successor in Pittsburgh, but Young's reluctance to accept his new charge and the petition of Pittsburgh Catholics moved the Holy See to reverse its decision. Five months after his transfer to Erie, O'Connor was re-appointed to Pittsburgh on December 20, 1853, and Young accepted the leadership of Erie.