In April 2004, while on assignment for The Times, he was kidnapped during the First Battle of Fallujah. He was freed unharmed after eight hours of captivity.

On 5 September 2009, Farrell, his interpreter Sultan Munadi and their driver were in a village south of Kunduz, Afghanistan, investigating the NATO strike on two hijacked fuel tankers that killed 56 Taliban men and more than a dozen villagers. Munadi was warned earlier by one of his local friends that the villagers were very angry about the strike and it would not be safe to visit the place. However, the journalists decided to go there, and got out of the car at the site of the wrecked tankers to interview the eye-witnesses. Soon after, an alarm was raised about a group of 10 militants approaching. The driver fled into a field and hid in tall grass, while Farrell and Munadi were kidnapped.

On 9 September, four days after the kidnap, a British army raid rescued Farrell. Corporal John Harrison, a British soldier from the 1st Battalion, The Parachute Regiment, Special Forces Support Group and Farrell's interpreter, Sultan Munadi were killed.During his captivity, media organizations and Wikipedia imposed a news blackout on his kidnapping, similar to that which had taken place during the kidnapping of fellow New York Times journalist David Rohde a few months earlier, for fear that media attention would increase the risk to the captives.