Oswiu's childhood was spent in exile. In 616 when he was four years old, his father, the Bernician king Æthelfrith, was killed in battle and his rival Edwin of Deira assumed the throne. Oswiu and his older brother Oswald fled north to the Irish kingdom of Dal Riata in western Scotland where they were baptised Christian. After Edwin's death, Oswald re-gained his father's throne in 634. We know nothing of Oswiu's whereabouts as a young man in his twenties during his brother's reign. But his marriage to the British princess Rieinmelth of Rheged suggests that he played some part in Oswald's diplomacy and alliance-building.

In 642 Oswiu succeeded his brother as king. But he did so from a position of weakness. Oswald had been defeated in battle and killed by Penda of Mercia and his allies. Northumbria remained vulnerable for some years to raiding from outside and the alliance which Oswald had formed with Wessex unravelled. Not only did Oswiu begin his reign with no influence in southern England, but he was weak even in Northumbria. He gained control in Bernicia but, unlike his brother, he was unable to assert his authority fully in Deira despite his claim on the Deiran throne through his mother Acha. Oswine, who was a member of the Deiran royal house in the male line, ruled there as sub-king.

Early in his reign, Oswiu made a diplomatic initiative aimed at strengthening his position both in southern England and in Deira. He asked the king of Kent for a marriage with Edwin's daughter Eanflæd, then a young woman of seventeen or eighteen years of age. This marriage, as well as opening up an alliance in the south of England, signalled a move to reconcile the rivalries of their parents' generation.

From another perspective, this marriage may have caused a difficulty. Aidan, the Bishop of Lindisfarne who had been at the centre of Oswald's integration of church and state, seems to have become distanced from Oswiu and aligned himself with Oswine. Bede gives us no hint of what lay behind this; but a marriage such as this between first cousins would have been unacceptable to Aidan. He might also have considered it bigamous on account of Oswiu's earlier marriage to Rieinmelth; and he might have had reservations too on behalf of an Irish princess by whom Oswiu had a son Aldfrith. The moral code of traditional Anglo-Saxon kingship in this respect did not look good to an Irish monk.

In 651 Oswine raised an army to challenge Oswiu but at the last minute he backed down and went into hiding. He was betrayed and put to death on Oswiu's orders. This murder was thought to be particularly abhorrent and Eanflaed was instrumental in negotiating recompense whereby Oswiu atoned by dedicating a new monastery at Gilling with Trumhere, a relative of Oswine, as abbot. Later in the same year Aidan died and Oswiu was able to establish a better working relationship with his successor Finan who may have taken a more accommodating line than his predecessor in the church's involvement with the state.

With the failure of Oswine's challenge, Oswiu's reign moves into a second stage. He still did not rule Deira directly but Oswald's son OEthelwald was installed as sub-king. Still lacking the military might to challenge Penda, Oswiu conducted a skilful diplomatic campaign to gain influence around the edges of the Mercian power block. He negotiated a marriage between his son Alhfrith and Penda's daughter Cyneburh. Through Alhfrith he also gained influence with Penda's son Paeda who was ruling as sub-king in Middle Anglia. Paeda asked for a marriage with Oswiu's daughter Alhflaed and came to Northumbria to accept baptism at the hands of Bishop Finan. King Sigeberht of Essex was also baptised in Northumbria. Oswiu was then able to install bishops in both kingdoms, using his own Lindisfarne church as an instrument in the power play.

Penda responded to these moves by asserting his power in East Anglia in 654 and in the following year, 655, he brought an army into Northumbria. Oswiu, who at this stage had no serious military reputation, challenged by the unconquored warrior-king of the age, faced the greatest crisis of his reign. He agreed to place his own son Ecgfrith as a hostage in Penda's household and he tried to buy off Penda. Negotiations broke down and battle was joined by the River Winwaed (the name and place are not now known) with Penda at the head of a large army which also includedOEthelwald who saw the opportunity of gaining the Northumbrian throne as Penda's nominee. Against the odds, Oswiu's forces won the day and Penda was killed. In thanksgiving for the victory Oswiu gave land to endow twelve new monasteries and dedicated his infant daughter Ælfflæd to the church as a nun. She was given over to the care of Abbess Hild.

Suddenly Oswiu was the most powerful king in England with both Northumbria and Mercia now in his domain. He re-structured both civil and ecclesiastical organisation. He himself retained his Northumbrian kingship and ruled directly in the northern half of Mercia along with Lindsey and Hatfield; he installed his son Alhfrith as sub-king in Deira and his son-in-law, Penda'a son Paeda, as sub-king in Southern Mercia. He set up a new diocese for Mercia, until then a pagan kingdom, under Bishop Diuma and sent Bishop Cedd to revive the East Saxon diocese. The Lindisfarne bishopric under Finan became, in effect, a metropolitan seat with jurisdiction over its offshoots.

This over-arching organisation could not be sustained for long. Paeda was assassinated in the following year, 656, depriving Oswiu of a dependent ally within the Mercian royal household and in 658 disaffected nobles overthrew Oswiu's remaining client rulers and installed Wulfhere, another of Penda's sons, as king in Mercia. Oswiu was not strong enough to hold Mercia directly and the two kings settled for co-existence without open warfare.

Accounts of the later stages of Oswiu's reign are dominated by the religious politics which culminated in 664 with the synod at Whitby. Oswiu himself followed the Irish church centred at Lindisfarne, but the influences of Roman Christianity were becoming more apparent. Wilfrid, who along with Benedict Biscop had travelled to Rome, gained influence with Alhfrith. In Oswiu's own court, his wife Eanflæd followed the Roman calendar with the result that the king could be celebrating Easter according to the Irish calendar while the Queen's household were still observing lent. This, according to Bede's account, was the issue that prompted Oswiu to call a conference at Whitby to examine the claims of the two religious traditions.

Oswiu's ruling that the kingdom should follow the practices of the Roman church had far-reaching consequences. Immediately, Lindisfarne's status at the very centre of state organisation was reduced, though it was to remain influential in other ways. But in a wider cultural perspective, Oswiu had opted for the mainstream western tradition. Thus he opened up Northumbria to a new range of religious, intellectual and artistic influences. The meeting of insular and continental ideas gave rise to the great religious and cultural flowering of the later 7th and 8th centuries in Northumbria which is often known as the Golden Age. Bede himself was both a product of and contributor to that age.

Oswiu died in 670 aged about 58 years after an unusually long reign of twenty-eight years. He dominated the Northumbrian and, for a while, the wider English scene in the middle years of the century. He faced and overcame the most fearsome warrior-king of the age and he saw off at least two attempts to usurp his position from within. Unusually for a king of his era, he died in his bed and not on the field of battle.