The Swede curled home an injury-time free-kick off the foot of the post eight minutes after David Vaughan had dragged the Black Cats back into a game they looked destined to lose with a stunning 30-yard piledriver.
Until Vaughan's intervention, it looked as though it would be Rovers easing themselves out of Barclays Premier League relegation trouble with a second successive victory after Simon Vukcevic's 17th-minute opener.
Jumping for joy: O'Neill savoured victory in his first game in charge of the Black Cats
MATCH FACTS Sunderland: Westwood, O'Shea, Bramble, Brown, Bardsley, Larsson, Colback (McClean 76), Vaughan, Richardson, Sessegnon, Wickham (Ji 76).
Subs: Kilgallon, Meyler, Carson, Elmohamady, Noble.
Goals: Vaughan 84, Larsson 90+2.
Blackburn: Robinson, Lowe, Samba, Dann, Givet (Olsson 22) (Henley 46), Salgado (Hanley 51), Dunn, Pedersen, Vukcevic, Formica, Yakubu.
Subs: Bunn, Blackman, Goodwillie, Roberts.
Goal: Vukcevic 17.
Referee: Peter Walton (Northamptonshire)
Steve Kean's men also had a second goal ruled out for a foul by Chris Samba on keeper Keiren Westwood, but eventually succumbed as the home side improved markedly after a poor first half.
It was just Sunderland's fourth home win in 2011 and their second over Blackburn, and just what the bulk of acrowd of 39,863 had turned up to see.
Chairman Ellis Short, writing in his programme notes for the game, admitted he had ended Steve Bruce's tenurebecause the team had been under-performing for a significant period, and not as a knee-jerk reaction to the home defeat by Wigan in his finalgame at the helm.
The American had hoped for an immediate lift by replacing him with O'Neill, the man whose appointment Sunderland fans have dreamt of for years.
However, just as the Irishman had predicted, the goodwill with which he had arrived by virtue of his support for the club as a boy, would take him only so far.
In fairness, the boos which greeted the half-time whistle were not aimed at him, but at an insipid 45 minutes which summed up many of the problems which ultimately led to Bruce's demise.