He first played for his primary school team in Hawarden, Wales, breaking all local scoring records in his first season. From the age of 14 he attended the FA's School of Excellence in Staffordshire but also continued to study at the local Hawarden High School and picked up ten GCSEs. Liverpool signed Owen as an apprentice while in his teens, although as a boy he had been a supporter of their local arch-rivals Everton.

Liverpool's youth team won the FA Youth Cup in 1996. He signed professional forms for the senior team just after his seventeenth birthday in December 1996, making a sensational debut for the team against Wimbledon in May 1997, coming on as a substitute and scoring a goal. He quickly became a first team regular in the following 1997-98 season, and was that season's joint top scorer in the Premier League, scoring eighteen goals (equal with Chris Sutton and Dion Dublin). That same season, he was voted PFA Young Player of the Year. He continued to be a consistent goalscorer for Liverpool, and in 2001 helped the club to their most successful season for several years. The team won the League Cup, FA Cup and UEFA Cup, with Owen scoring two goals in the last few minutes against Arsenal in the FA Cup final to turn what appeared to be a 1-0 defeat into a 2-1 victory. Surprisingly, however, he failed to score in the team's incredible 5-4 victory against Deportivo Alavés in the UEFA Cup, and was substituted in that game. At the end of the year, he became the first British player for twenty years to win the European Footballer of the Year award. Due to Liverpool's continued failure to win the Premier League or the Champions League, Owen was often linked with moves to other clubs, although he initially remained loyal to his first employers. However, due to stalled contractual talks in the summer of 2004, and with only one year remaining on his contract before he could leave the club on a free transfer, Liverpool sold Owen to Real Madrid, in Spain, for a fee of 12 million euros on 13 August 2004, with midfielder Antonio Nunez moving in the other direction. Owen had a slow start to his Madrid career and drew some criticism from fans and the Spanish press for his lack of form, often being confined to the substitutes bench during matches. However, a successful return to action with the England team in October 2004 seemed to revive his morale, and on his first match back with Madrid following this he scored his first goal for the team, the winner in a 1-0 UEFA Champions League group game victory over Dynamo Kiev. He quickly followed this up just a few days later with his first Spanish league goal for the team in a 1-0 victory over Valencia, and also hit the target in the three of the next four games to make it 5 goals in 7 successive matches. He ended the season with a highly respectable 13 goals in La Liga, the topscorer of the club that season, as Real finished runners-up in the Spanish championship.England to the quarter-finals.