Powel was born in Llanwrtyd in 1845 and educated there and in Llandovery before matriculating at Jesus College, Oxford in 1869.

In the following year, 1884, he was appointed Professor of Celtic, continuing in this position until he retired in 1918.

He edited (1879–1886) and contributed articles on linguistics and literature to the Welsh language journal Y Cymmrodor; he also edited medieval texts, including Thomas Stephens's version of Y Gododdin.

He helped Cardiff to obtain important manuscripts and books for the university and city libraries and was a member of the governing body of the National Library of Wales from its foundation.

He said that he chose to give his time to his students rather than to his own research.