More recently, O'Connell has begun taking acting parts in films again. She has appeared in three films, Spork, Going Down in LA-LA Land and the box-office hit The Change-Up. Her roles in these films have been more comedic than dramatic, similar to her roles on Three's Company and the mid-1980s film Hot Chili.

She achieved lasting fame within the B-movie, horror film universe for her role as Dameia in Galaxy of Terror. Released in 1981, it was the second consecutive horror film she had appeared in, having also appeared in the 1980 film New Year's Evil. O'Connell's place as a scream queen legend was guaranteed with Galaxy of Terror due to the unique, bizarre, and exploitative scene in which her character is killed.

During the 1990s, O'Connell's focus shifted away from acting and into publishing. Her Canoco Publishing Company has continued operations for 20 years, and produces Astro Caster Magazine, a trade magazine which combines traditional casting for actors and actresses with astrological insights and information.

The scene as it was released contained enough nudity from the buxom O'Connell (and a body-double used for various shots) and was sexually explicit enough to achieve cult status for the movie and the Actress. According to R. J. Kizer on the 2010 Shout! Factory re-release of Galaxy, it was initially even more explicit; in fact, it earned an X-rating from the Motion Picture Association of America (MPAA) upon the screening of its first cut. Kizer had to make a series of small edits to eliminate two things the MPAA gave the scene an X-rating for: some of Dameia's facial expressions as she's raped were too "ecstatic" and deemed suggestive or inappropriate, and some of the motions made by the giant worm and the nude Actress entangled in tentacles underneath it simulated sexual intercourse too realistically. These tiny cuts allowed the film to maintain its desired R-rating, but even so, the sequence was restricted or the movie was banned from cinematic release in several countries for the lewd sexual content of this scene. Over time, the cut sequences were lost and are not on any currently released version of the film.