Metro-Goldwyn-Mayer hired Haley for the part of the Tin Man in The Wizard of Oz after its contracted song-and-dance comedian Buddy Ebsen suffered a near-fatal allergic reaction after inhaling aluminum dust from his silver face makeup; the dust settled in Ebsen's lungs and, within a few days of principal photographic testing, he found himself struggling to breathe. For Haley, to avoid the same catastrophe, the dust was converted into a paste—even so, the paste caused an eye infection that sidelined Haley for four shooting days. Surgical treatment averted serious or permanent damage to Haley's eyes. Haley also portrayed the Tin Man's Kansas counterpart, Hickory, one of Aunt Em and Uncle Henry's farmhands.

Haley did not remember the makeup or the costume fondly. Interviewed about the film years later by Tom Snyder, he related that many fans assumed making the film was a fun experience. Haley said, "Like hell it was. It was work!" For his role as the Tin Woodman, Haley spoke in the same soft tone he used when reading bedtime stories to his children. Oz was one of only two films Haley made for MGM. The other was Pick a Star, a 1937 Hal Roach production distributed by Metro-Goldwyn-Mayer.

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