The 36-year-old said after his fourth Crucible triumph in May that he would be taking six months out of the sport, and then he initially refused to sign the contract players must return to World Snooker before being eligible to compete.
Appearance money was a factor behind O'Sullivan's delay, but talks with World Snooker chairman Barry Hearn eventually saw him sign.
Back in action today at the Players Tour Championship event at the South West Snooker Academy in Gloucester, O'Sullivan led 2-0 and 3-2 but Bradford left-hander Bedford forced a deciding frame and took it with a fine break of 98 to claim a terrific 4-3 victory.
O'Sullivan took the first two rather scrappy frames to leave Bedford, also aged 36, needing to win four of the next five.
Remarkably he managed to do so, taking advantage of O'Sullivan errors initially by picking off points in several visits to take the third frame.
Bedford levelled the match but then a run of 47 from O'Sullivan saw him inch ahead again.
Once more, Bedford hauled himself level, and then with the pressure on showed no sign of nerves as he almost finished off with a century.
Bedford qualified for the World Championship in 1998 but has not been back since. He won just £10,013 in prize money over the last two seasons and supplements his playing income by coaching in his home city.
O'Sullivan signed his playing contract too late to be eligible for the Shanghai Masters, which begins on September 17, and having pulled out of the Premier League may have little competitive match practice before the International Championship in Chengdu, China.
That new event begins on October 28 and offers a top prize of £125,000, ensuring the world's leading players will make the trip.
By way of comparison, this week's event in Gloucester pays £10,000 to the winner.
O'Sullivan, having paid £100 to enter, leaves with no prize money as a loser in the last-128 stage.
He complained last year that he felt he was being "raped" and "blackmailed" when competing in the PTC events, which despite the low prize money on offer carry valuable world ranking points. O'Sullivan later apologised for the comments.