And, despite a flat first-half performance, a late glut of pressure from the hosts resulted in Walters thumping home a deserved equaliser to cancel out Martin Hinteregger's opener.
Shane Duffy thought he had snatched a winner two minutes later, only for the referee to disallow the header for a foul by the defender, who led with a raised arm.
Ireland had stepped up the pressure in a frantic second half, with Austria debutant Stefan Lainer having previously hooked Kevin Long's header off the line to preserve the lead.
But ultimately it was Walters who proved Ireland's hero, as O'Neill's side maintained their unbeaten run in qualifying to make it 12 points from six matches.
Shorn of the suspended Marko Arnautovic, Austria nevertheless started brightly - Zlatko Junuzovic's low effort forcing Darren Randolph into action.
Walters had Ireland's first sighting of goal, only to skew his strike wide from 18 yards out, and the hosts' sluggish opening was punished in the 31st minute.
David Alaba's low corner found Hinteregger via a couple of dummies and, though the defender scuffed his first-time effort, Randolph could not get down quickly enough to keep it out.
Duffy went close with a header after the restart, before proving his worth at the other end with a brilliant block from Guido Burgstaller's close-range attempt.
Walters continued to trouble Austria's defence as Ireland finally burst into life, and only Aleksandar Dragovic's well-timed challenge prevented the Stoke City man getting through on goal on the hour.
Wes Hoolahan replaced Harry Arter soon afterwards and the playmaker had an immediate impact as his wicked cross was deflected goalwards by Lainer, but goalkeeper Heinz Lindner was well placed to spare his team-mate's blushes.
Lainer was soon involved again - doing well to clear Long's header off the line - but Ireland were not to be denied for much longer.
With Randolph having pulled off a supreme stop at the other end to keep out Florian Grillitsch, Walters got the better of Dragovic and then kept his cool to drill a venomous volley into the bottom-right corner and send the Aviva Stadium into raptures.
5 - Five of the last seven goals the Republic of Ireland have scored in home qualifiers have been scored by Jonathan Walters. Leveller. pic.twitter.com/v6nZcIAd4e— OptaJoe (@OptaJoe) June 11, 2017
Duffy's header appeared to have snatched all three points moments later, but the referee's decision - vehemently protested by the hosts - meant that Ireland had to settle for a share of the spoils.
Key Opta stats:
- Martin O'Neill extended his unbeaten run in home qualifying matches as national team manager of the Republic of Ireland to nine (W5 D4).
- Martin Hinteregger's strike was the first goal that the Republic of Ireland have conceded in a qualification game at the Aviva Stadium since John O’Shea's own goal against Scotland in June 2015.
- David Alaba has provided an assist in five of his last seven competitive outings for Austria, including each of the last two.
- Robbie Brady has been directly involved in six goals in his last nine internationals for the Republic of Ireland (three goals, three assists).