Of Welsh descent, Owen was born at Stadhampton in Oxfordshire, and was educated at Queen's College, Oxford (B.A. 1632, M.A. 1635). In 1644, Owen married Mary Rooke (d. 1675). The couple had 11 children, ten of whom died in infancy. One daughter survived to adulthood, married, and shortly thereafter died of consumption.
On 29 April he preached before the Long Parliament. In this sermon, and in his Country Essay for the Practice of Church Government, which he appended to it, his tendency to break away from Presbyterianism to the Independent or Congregational system is seen. Like John Milton, he saw little to choose between "new presbyter" and "old priest."
He became pastor at Coggeshall in Essex, with a large influx of Flemish tradesmen. His adoption of Congregational principles did not affect his theological position, and in 1647 he again argued against Arminianism in The Death of Death in the Death of Christ, which drew him into long debate with Richard Baxter. He made the friendship of Fairfax while the latter was besieging Colchester, and addressed the army there against religious persecution. He was chosen to preach to parliament on the day after the execution of King Charles I, and succeeded in fulfilling his task without directly mentioning that event.
Another sermon preached on 29 April, a plea for sincerity of religion in high places, won not only the thanks of parliament but the friendship of Oliver Cromwell, who took Owen to Ireland as his chaplain, that he might regulate the affairs of Trinity College, Dublin. He pleaded with the House of Commons for the religious needs of Ireland as some years earlier he had pleaded for those of Wales. In 1650 he accompanied Cromwell on his Scottish campaign. In March 1651, Cromwell, as Chancellor of Oxford University, gave him the deanery of Christ Church Cathedral, Oxford, and made him Vice-Chancellor of Oxford University in September 1652; in both offices he succeeded the Presbyterian, Edward Reynolds.
During his eight years of official Oxford life Owen showed himself a firm disciplinarian, thorough in his methods, though, as John Locke testifies, the Aristotelian traditions in education underwent no change. With Philip Nye he unmasked the popular astrologer, William Lilly, and in spite of his share in condemning two Quakeresses to be whipped for disturbing the peace, his rule was not intolerant. Anglican services were conducted here and there, and at Christ Church itself the Anglican chaplain remained in the college. While little encouragement was given to a spirit of free inquiry, Puritanism at Oxford was not simply an attempt to force education and culture into "the leaden moulds of Calvinistic theology." Owen, unlike many of his contemporaries, was more interested in the New Testament than in the Old. During his Oxford years he wrote Justitia Divina (1653), an exposition of the dogma that God cannot forgive sin without an atonement; Communion with God (1657), Doctrine of the Saints' Perseverance (1654), his final attack on Arminianism; Vindiciae Evangelicae, a treatise written by order of the Council of State against Socinianism as expounded by John Biddle; On the Mortification of Sin in Believers (1656), an introspective and analytic work; Schism (1657), one of the most readable of all his writings; Of Temptation (1658), an attempt to recall Puritanism to its cardinal spiritual attitude from the jarring anarchy of sectarianism and the pharisaism which had followed on popularity and threatened to destroy the early simplicity.