Daley was named Coadjutor Bishop of Harrisburg on July 31, 1967, and later succeeded Bishop Leech as the sixth Bishop of Harrisburg on October 19, 1971. During his 12-year-long tenure, he established the Diocesan Office of Planning, Diocesan Development Office, and Emmaus Program for priests. He called for a temporary moratorium on building nuclear power plants after the accident at the Three Mile Island Nuclear Generating Station near Harrisburg in 1979.