At the age of 10, Derrane began playing a one-row diatonic button accordion or melodeon, taking lessons with Jerry O'Brien, an immigrant from Kinsale, County Cork, Ireland.

By the age of 14 Derrane was performing at the thriving "kitchen rackets" (house parties) on the Boston Irish scene.

On learning from Boston resident fiddler Seamus Connolly that Joe Derrane was still alive, Earle Hitchner, called "arguably the pre-eminent Celtic critic in this country" by The Boston Globe, contacted him in the early fall of 1993, and Derrane privately began playing the button accordion again.

But his virtuosic performances (accompanied by Felix Dolan on piano) at Wolf Trap were greeted with overwhelming enthusiasm and acclaim, and soon Derrane embarked on a second career as a button accordionist.

He was the subject of a documentary by Frank Ferrel, As Played By Joe Derrane, and of another broadcast by Irish-language station TG4 as part of its Sé mo laoch series.

In 1998 Derrane was inducted into the Hall of Fame of Comhaltas Ceoltóirí Éireann (North American Province) for his contribution to Irish traditional music.