Ireland looked down and out at 111-5 in reply to England's 327-8 but O'Brien clubbed six sixes and 13 fours to power his side to victory with 329-7 - smashing Matthew Hayden's record for the quickest World Cup century on the way.
O'Brien was run out in the penultimate over but his sixth-wicket stand of 162 with Alex Cusack effectively clinched the Group B match for a win even more memorable than Ireland's victories against Pakistan and Bangladesh at the last World Cup.
Hayden set the previous record for the quickest World Cup century off 66 balls for Australia against South Africa in 2007, but O'Brien hit huge sixes to all corners of Bangalore's Chinnaswamy Stadium as England's bowling disintegrated once Graeme Swann's 10 overs were completed.
England could have won but for four dropped catches, including captain Andrew Strauss's spill of a skied shot when O'Brien was on 91. Matt Prior spilled a high catch from Ed Joyce, James Anderson let a shot by Niall O'Brien sail through his hands on the boundary for six and Michael Yardy dropped Cusack on 32 off his own bowling.
But O'Brien and Cusack hit 62 off the batting powerplay from the 32nd over to take the game away from England, which must now regroup for Sunday's match with in-form South Africa.
"Hopefully it will galvanize the team and the equation now is pretty simple," Strauss said. "We can't afford any slip ups."
Ireland is now competing with England for a quarterfinal berth.
On the wicket where England and India each hit 338 in last weekend's memorable Group B tie, John Mooney hit the winning runs with a four off Anderson to finish unbeaten on 33. Trent Johnston made 7 not out.
"They go out here with an attitude of 'we've got nothing to lose,' and they don't," Strauss said. "That doesn't make things easy for you."
England had looked in total control after Jonathan Trott hit 92 and Anderson bowled Ireland captain William Porterfield with the first ball of the Irish reply. Swann took three wickets in 13 balls to make it 111-5 but that was as good as it got for England.
Trott and Ian Bell added 167 for England's third wicket, with Trott equaling the record set by Viv Richards and matched by Kevin Pietersen for the quickest ever 1,000 one-day international runs - reaching the mark in 21 innings.
Bell struck 81 and Pietersen chipped in with 59 as England looked to have justified Strauss' decision to bat after winning the toss.
England could have set an even bigger target, but slipped from 278-2 to 327-8. After early struggles, Trent Johnston finished with figures of 2-58 - becoming the first Ireland player to take 50 one-day wickets - and Mooney had Tim Bresnan caught off the last ball of the 50 overs to finish with one-day best figures of 4-63.
