As a young man he left Ireland in 1607 with The Earls.  He grew up in the Spanish part of what is now Holland and spent forty years serving in the Spanish Irish regiment.   He saw most of his combat in their war there with the native Dutch and notably at the Arras siege, where he commanded the Spanish garrison.  O'Neill was like many Gaelic Irish officers in the Spanish service, very hostile to the English Protestant presence in Ireland.   In 1627 he was involved in petitioning the Spanish monarchy to invade Ireland using the Irish Spanish regiments.

O'Neill proposed that an Irish Republic under Spanish protection be established to avoid in-fighting between Irish Catholic landed families, over which of them would provide a prince or king of Ireland.   This plot came to nothing.   However in 1642 O'Neill returned to Ireland with three hundred veterans to aid the uprising that had begun the previous year.

The Irish campaign was subsumed in the civil wars of the period.   Because of his military experience, O'Neill was recognized at the end of July 1642, as the leading Irish representative of the O'Neills.   The previous head Phelim O'Neill resigned the northern command of the Irish rebellion in Owen Roe's favour.

But jealousy between the kinsmen was complicated in October 1642 by differences between the Confederation of Kilkenny and Owen Roe.   Owen Roe professed to be acting for the English King Charles. His real aim was an independent Catholic Ireland.  The council (Confederacy) - who were Old English mainly - desired merely to secure religious liberty under the crown of England.  

More concretely O'Neill wanted the overturn of the Plantation of Ulster and the recovery of the O'Neill clan's ancestral lands.   Moreover he was unhappy that the majority of Confederate military resources were directed  to the Leinster Army. Preston, its commander was also a Spanish veteran but he and O'Neill had an intense personal dislike of each other.

Although Owen Roe O'Neill was a competent general, he was outnumbered by the Scottish Covenanter army that had landed in Ulster in 1642.   Following a defeat at Clones  O'Neill had to abandon central Ulster and was followed in retreat by thousands of refugees, fleeing the retribution of the Scottish soldiers for the Irish massacre of Protestant in the rebellion of 1641.

O'Neill complained that the devastation of Ulster made it look, "not only like a desert, but like hell, if hell could exist on earth".  O'Neill did his best to stop the killings of Protestant civilians, for which he received the gratitude of many Protestant settlers. From 1642-46 a stalemate existed in Ulster, which O'Neill used to train and discipline his Ulster Army.  This poorly supplied force nevertheless gained a very bad reputation for plundering and robbing friendly civilians around its quarters in northern Leinster and southern Ulster.

Furnished with supplies by the Papal Nuncio Rinuccini, in 1646 O’Neill attacked Major-General Robert Munro's Covenanter Army from Scotland, who had landed in Ireland.   O'Neill utterly routed Monro at Benburb , killing or capturing up to 3000 Scots.   However after being summoned to the south by Rinuccini, he failed to take advantage of the victory, and allowed Monro to remain at Carrickfergus, completely unmolested. 

This might well have been the greatest failing ever in Irish Nationalist history, for the country was his for the taking.

In March 1646 a treaty was signed between the Catholics and Ormonde, which would have committed the Catholics to sending troops to the aid of the King's side in the (civil) war in England.  The peace terms however, were rejected by a majority of the Irish Catholic military and the Catholic clergy including the Nuncio Rinuccini.  O'Neill led his joint Leinster/Ulster army, in a failed attempt to capture the Irish capital city from Ormonde.  However, the Irish Confederates suffered heavy military defeats the following year at the hands of the Roundhead forces in Ireland leading to a moderation of their demands and a new peace deal with the Royalists.  This time O'Neill was alone among the Irish generals in rejecting the peace deal and found himself isolated by the departure of Rinuccini from Ireland in February 1649.

So alienated was O'Neill by the terms of the peace that the Confederates had made with Ormonde that he refused to join the Catholic/Royalist coalition and in 1648 his Ulster army fought against other Irish Catholic armies.   He made overtures for alliance to General Monck, who was in command in the north, to obtain supplies for his forces, and at one stage even tried to make a separate treaty with the English Parliament against the Royalists in Ireland.  Failing to obtain any better terms from them, he turned once more to Ormonde and the Catholic confederates, with whom he was prepared to co-operate more earnestly, when Oliver Cromwell's army arrived in Ireland in August 1649 and brought the Catholic party face to face with serious danger.

Before, however, anything was accomplished by this combination, in 1649 Owen Roe died.  The traditional Irish belief was that he was poisoned by the English, but it is now thought more likely that he died of disease.  The Catholic nobles and gentry met in Ulster in March to appoint a commander to succeed Owen Roe O'Neill, and their choice was the Bishop of Clougher Herber MacMahon, the chief organizer of the recent Clonmacnoise meeting.  

O'Neill's Ulster army was unable to prevent Cromwell’s complete conquest of Ireland, despite Hugh (Dubh) O'Neill's (Owen Roe's nephew) successful campaign at Clonmel;  and was destroyed at Donegal ( Battle of Scarrifhollis) in 1650.   Its remnants continued guerrilla warfare until 1653, when they surrendered at Cloughoughter in County Cavan.   Most of the survivors were transported, to become another wave of ‘wild geese’ to serve in the Spanish Army.

In the nineteenth century, O'Neill was celebrated by the Young Ireland movement which saw O'Neill as an Irish patriot.  

The patriot Thomas Davis wrote a famous song about O'Neill, titled "The Lament for Owen Roe" which was popularised in The Nation, their newspaper.