In 1820 he went to Dublin and settled finally to the work of literature. He published a poem, The Celt's Paradise, and his Damon and Pythias was performed at Covent Garden in 1821. During a short visit to Kilkenny he married, and in 1822 planned in conjunction with his elder brother, Michael (1796—1874), a series of tales illustrative of Irish life, which should be for Ireland what the Waverley Novels were for Scotland. He then set out for London, and supported himself by writing for magazines and for the stage, a volume of miscellaneous essays was published anonymously in 1824, called Revelations of the Dead Alive. In April 1825 appeared the first series of Tales of the O'Hara Family, which achieved immediate and decided success. One of the most powerful of them, Crohoore of the Bill Hook, was by Michael Banim.
In 1826 a second series was published, containing the Irish novel, The Nowlans. John's health had given way, and the next effort of the "O'Hara family" was almost entirely the production of his brother Michael. The Croppy, a Tale of 1798 (1828) is hardly equal to the earlier tales, though it contains some wonderfully vigorous passages. The Mayor of Windgap, The Ghost Hunter (by Michael Banim), and The Smuggler followed in quick succession, and were received with considerable favour. John Banim, meanwhile, had become much straitened in circumstances. In 1829 he went to France, and while he was abroad a movement to relieve his wants was set on foot by the English press, headed by John Sterling in The Times. A sufficient sum was obtained to remove him from any danger of actual want.
He returned to Ireland in 1835, and settled in Windgap Cottage, a short distance from Kilkenny; and there, a complete invalid, he passed the remainder of his life, dying on the 13th of August 1842. Michael Banim had acquired a considerable fortune which he lost in 1840 through the bankruptcy of a firm with which he had business relations. After this disaster he wrote Father Connell (1842), Clough Fionn (1852), The Town of the Cascades (1862). Michael Banim died at Booterstown on the 30th of August 1874.