Early in his career, O'Toole worked with environmental groups to oppose the United States Forest Service's subsidized sales of public forest timber to the timber industry. His book Reforming the Forest Service built on his experience during this effort, and proposed a number of free-market solutions to management of U.S. public land and timber. He has written analyses of the usage and development plans of a number of U.S. national forests, working with state environmental agencies and other groups. In the 1990s, O'Toole emerged as an outspoken critic of New Urbanist design and smart growth strategies after learning in 1995 of a county plan to rezone his neighborhood to allow higher density and mixed use development. O'Toole contends that these development strategies—in which regulatory measures and tax incentives are employed to encourage denser development, more efficient land use, and greater use of public transportation—ignore the desires and preferences of most housing consumers and ultimately waste public funds. He has campaigned against smart growth policies and light rail systems in several U.S. states as well as in Winnipeg, Manitoba, and Ottawa, Ontario. His 2001 book, The Vanishing Automobile and Other Urban Myths, was written as a detailed critique of these styles of planning. He continues to advocate for free market solutions to urban planning and design in his writing and teaching. O'Toole has written four books published by the Cato Institute. The Best-Laid Plans argues that long-range comprehensive government planning necessarily relies on fads and fails to account for current and future public desires and needs. Gridlock looks at the history of transportationin America and argues that the future is in autonomous personal vehicles, not rail transit or high-speed rail. American Nightmare examines the history of housing in America and argues that zoning and, more recently, growth-management planning represents efforts by the middle- and upper-classes to separate themselves from the working class. Romance of the Rails looks at the history of urban and intercity rail transit in the United States to show why they once worked but no longer work today.
Personal life
He moved from Bandon, Oregon to Camp Sherman, Oregon, where he runs the "Thoreau Institute." While critical of government subsidies to all forms of transportation, O'Toole is a fan of passenger trains and an amateur rail historian. He currently runs a web site, Streamliner Memories, to share scanned copies of his personal library of railroadiana.