The Black Cats set up an enticing fourth-round derby against Middlesbrough with an easy 2-0 win over Peterborough at Lndon Road.
Sebastian Larsson's curling free-kick evaded the entire Posh defence and nestled into the corner to give Sunderland the lead before James McClean's second goal in six days sealed the win for O'Neill's men at London Road.
Being a Sunderland fan growing up, O'Neill is acutely aware that the Wearside club have not lifted the FA Cup since a famous win over Leeds in 1973 and that their last appearance in the final came in 1992 when Liverpool ran out 2-0 winners at Wembley.
The Black Cats are a much-improved outfit compared to the one O'Neill inherited from Steve Bruce and he is conscious of what a trip to Wembley would mean to Sunderland.
"The cup is important to this club," he said.
"We have pictures all around the club of '73. There aren't too many of '92. I'm aware we haven't done well in the competition recently but I will try and put that right."
The next hurdle Sunderland will have to overcome to reach Wembley comes in the form of Middlesbrough, who beat Shrewsbury to reach the last 32.
O'Neill is looking forward to what promises to be a fiery encounter against their npower Championship neighbours.
"The last few supporters in the ground let out a big roar when the draw was made," O'Neill said.
"It will be one that we look forward to. It's a great tie for both sets of supporters and we are at home so we will see if we can make that count."
