The European theatre and the wars of religion were to shape the next distinctive chapter in the history of Ulster. Key to the period was the most powerful Ulster Lord: Hugh O'Neill had been created the 2nd Earl of Tyrone on the death of his grandfather Con Bachach. He had proved, as was previously mentioned, a humane character in a difficult age and had closely worked with the English and supplied his troops at their disposal. He did however an ambitious interest in his position and favoured those who could assist him to improve it. The opportunity for him to play a further card in the power game emerged from the wars of religion. England's reformation had not been viewed lightly by the Roman Catholic hierarchy and attempts to ensure a successful counterreformation by the church were expected. Spain was the most powerful Roman Catholic power in Europe and had been the dominion of Charles V the Holy Roman Emperor who had exercised the secular muscle of the Roman church. A nightmare scenario for England would have been a Spanish invasion consolidating its forces in Ireland and combining as an invasion force with the Irish Roman Catholics.

England's fears appeared to be realized when a Spanish invasion fleet was first spotted from the South Coast. A network of hilltop beacons in Southern England was organized to relay and pass news of the anticipated invasion to the ill-prepared army and London. The Spanish Armada with 20 000 troops did reach Ireland but the weather was against them and the fleet was entirely destroyed on the ragged coastline of cliffs and jagged rock. There were few survivors and those that did make it were in no shape to fight but instead made their way to Scotland and returned to Spain.

It is believed to have been around this time that Hugh O'Neill developed the concept of an entirely Roman Catholic Irish island in which he would play the dominant part. Partly as a result of this new concept closer links between Ireland and Spain were established and it was regarded, as only a matter of time before another invasion force would try again. The Spanish force came and landed at Kinsale on the South coast of Ireland. The Ulster Chief O'Donnell set out immediately to meet the force but finding himself alone in the task set about raiding, plundering and burning the Kilkenny area in search of spoil. The Spanish in the meantime were besieged in Kinsale by the Royal army. Hugh O'Neill was not yet committed or sure of his new ideals and prevaricated for 4 months before moving to meet the Spanish troops. By this time the Spanish had sent a second fleet, which landed further west. It suffered much the same fate as the first Armada and five out of six vessels were lost.