O'Bannon passed away at the age of 63 in Los Angeles following a short illness.
He got his big break in the movie business with 1974's Dark Star, which he edited, starred in and co-wrote with director John Carpenter, who he met as a student at the University of Southern California's film school.
O'Bannon then went on to join the visual effects team for George Lucas' Star Wars, before writing the initial script for sci-fi classic Alien, originally titled Star Beast, with Ronald Shusett.
The duo later re-teamed to work on 1990's Total Recall, an adaptation of a short story by Philip K. Dick.
He also ventured into directing, making his debut in 1985 with Return of the Living Dead, a follow-up to George Romero's 1968 movie Night of the Living Dead.
His writing credits also include Blue Thunder, Screamers and Bleeders.
O'Bannon is survived by his wife Diane Louise Lindley and their son Adam.