Joseph O'Flaherty was born in Pittsburgh, Pennsylvania, but moved to Chicago, where he started his comedy career with the Second City Theater as Joe O'Flaherty. Along with several other Second City performers, he began appearing on the National Lampoon Radio Hour from 1973 to 1974. After seven years in Chicago, he moved to Toronto to help establish the Toronto Second City theatre troupe. During those years, he was one of the original writer/performers on SCTV, where he spent eight years on the show, playing such characters as Big Jim McBob (of Farm Film Report fame), Count Floyd/Floyd Robertson, and station owner/manager Guy Caballero who goes around in a wheelchair only for respect.
In 1989, Flaherty played a guest role in Married... with Children in season-four episode "Tooth or Consequences", as a recently divorced dentist who must repair Al Bundy's teeth.
During 1997–1998, Flaherty starred in the television adaptation of Police Academy (Police Academy: The Series) as Cmdt. Stuart Hefilfinger. The series lasted for only one season.
In 1999, Flaherty joined the cast of Freaks and Geeks, an NBC hour-long dramedy set in the 1980–1981 academic year, in which he played Harold Weir, the irascible father of two teens. Despite a dedicated cult following, the show only lasted one season. In the third episode, "Tricks and Treats", he dons a cheap vampire costume reminiscent of his "Count Floyd" character of the depicted era.
As of 2004, Flaherty is a member of the faculty at Humber College, where he teaches a comedy-writing course. He is also on the program's advisory committee. He is an accomplished Pianist.