In 1402, the English Parliament issued the Penal Laws against Wales, designed to establish English dominance in Wales, but actually pushing many Welshmen into the rebellion. In the same year, Owain captured his arch enemy, Baron Grey de Ruthyn. He was to hold him for almost a year until he received a substantial ransom from Henry.

In June 1402, Owain defeated an English force led by Sir Edmund Mortimer at the Battle of Bryn Glas, and Mortimer was captured. Glyndŵr offered to release Mortimer for a large ransom but, in sharp contrast to his attitude to de Grey, Henry IV refused to pay. Mortimer's nephew could be said to have had a greater claim to the English throne than Henry himself, so his speedy release was not an option. In response, Mortimer negotiated an alliance with Owain and married one of Owain's daughters. It is also in 1402 that mention of the French and Bretons helping Owain was first heard. The French were certainly hoping to use Wales as they had used Scotland: as a base to fight the English.

In 1403 the revolt became truly national in Wales. Royal officials reported that Welsh students at Oxford University were leaving their studies to join Owain, and Welsh labourers and craftsmen were abandoning their employers in England and returning to Wales. Owain could also draw on Welsh troops seasoned by the English campaigns in France and Scotland. Hundreds of Welsh archers and experienced men-at-arms left English service to join the rebellion.

Cynulliad Glyndwr ym Machynlleth (in Machynlleth)In 1404, Owain held court at Harlech and appointed Gruffudd Young as his Chancellor. Soon afterwards, he called his first Parliament (or Cynulliad or "gathering") of all Wales at Machynlleth, where he was crowned Prince of Wales and announced his national programme. He declared his vision of an independent Welsh state with a parliament and separate Welsh church. There would be two national universities (one in the south and one in the north) and a return to the traditional law of Hywel Dda. Senior churchmen and important members of society flocked to his banner. English resistance was reduced to a few isolated castles, walled towns and fortified manor houses.