Felim, together with his younger brother Turlough, entered King's Inns in London in June 1621,[6] as a knowledge of the law was considered important for landowners of the era.

[8][9] Shortly before the rebellion, O'Neill evicted some of his Gaelic tenants near Kinard and replaced them with British settler families who paid higher rents.

[10] In summer 1641,[11] O'Neill was elected MP for Dungannon in County Tyrone in a by-election for the Irish Parliament of 1640–1649, replacing Thomas Madden, who had died in office.

[16] This fear reached its high point in the late 1630s and early 1640s, when Thomas Wentworth, Lord Deputy for Charles I, was known to be planning widespread new plantations.

A crisis point was reached in 1641, when the Scottish Covenanters and English Long Parliament threatened to invade Ireland to finally subdue Catholicism there.

In this atmosphere of fear and paranoia, Phelim O'Neill became involved in a plot hatched by fellow Gaelic Irish Catholics from Ulster, to seize Dublin and swiftly take over the other important towns of Ireland.

O'Neill's role was to take towns and fortified places in the north of the country whereas Maguire was tasked with seizing Dublin Castle.

O'Neill went ahead and started the rebellion in the north, capturing the important fort of Charlemont but quickly found that he could not control the Irish Catholic peasantry he had raised.

These people, many of whom had been displaced during the Plantation of Ulster, began attacking the Scottish and English Protestant settlers with varying intensity over a period of 5 months.

On 24 October 1641 O'Neill issued the Proclamation of Dungannon[21] in which he claimed to have the King's authorisation to rise in defence of the Crown and the Catholic religion.

On 4 November 1641 O'Neill repeated these claims in his proclamation alongside Rory Maguire at Newry and read out a commission from Charles I of England dated 1 October, commanding him to seize: "... all the forts, castles, and places, of strength and defence within the kingdom, except the places, persons, and estates of Our loyal and loving subjects the Scots; also to arrest and seize the goods, estates, and persons of all the English Protestants, within the said kingdom to Our use.

[10] Nalson, in his "History of the General Rebellion in Ireland", described O'Neill as: "Sir Phelemy Roe O Neill, captain-generall of all the rebels, and chieftain of the O Neills, O Hagans, O Quyns, O Mellans, O Hanlons, O Corrs, McCans, McCawells, Mac Enallyes, O Gormelys, and the rest of the Irish septs in the counties of Tyrone and Ardmagh."

Phelim O'Neill was a member of the Confederate's General Assembly, but was sidelined in the leadership of Irish Catholics by wealthier landed magnates.

Phelim O'Neill served as cavalry commander under him and spent most of the next six years fighting against the Scottish Covenanter army that had landed in Ulster.

He and several other moderates such as Alexander MacDonnell, 3rd Earl of Antrim and Arthur Magennis, Viscount Iveagh left the Ulster army because of their dispute with the hard-liners.

The well-trained and supplied Parliamentarians crushed all Confederate and Royalist resistance and imposed a harsh settlement on Irish Catholics.