Arawn first appears in the First Branch of the Mabinogi, the collection of medieval Welsh prose tales preserved in the White Book of Rhydderch and the Red Book of Hergest. The story, composed around the eleventh century, opens with Pwyll, prince of Dyfed, hunting in the forest of Glyn Cuch. Pwyll becomes separated from his companions and hears the cry of a strange pack, different from his own. He sees a clearing where white hounds with red ears have brought down a stag, and without thinking he drives them off and sets his own dogs on the kill. A man in grey hunting robes appears, crowned and furious, and tells Pwyll that he has committed a grave discourtesy. The man is Arawn, king of Annwn, and the hounds are the Cwn Annwn, the hounds of the Otherworld.

Rather than demand blood vengeance, Arawn offers Pwyll a way to redeem his offence. Arawn's kingdom is oppressed by Hafgan, another king of Annwn who makes constant war upon him. Arawn has been unable to defeat Hafgan, and he asks Pwyll to trade places with him for a year and a day. Arawn will take Pwyll's form and rule Dyfed, while Pwyll will take Arawn's form and rule Annwn. At the end of that time, Pwyll must meet Hafgan in single combat at the ford and strike him a single fatal blow. Arawn warns Pwyll that Hafgan has a strange magic: if he is struck twice, the second blow will heal him. Pwyll agrees, and the two exchange bodies by magic, so that no one in either kingdom can tell the difference, not even Arawn's own wife.

Pwyll rules Annwn in Arawn's form for the full year, and during that time Arawn's wife approaches him as a husband. Pwyll, though tempted, refuses to sleep with her, maintaining his honour and Arawn's trust. When the year is up, Pwyll goes to the ford and finds Hafgan waiting. He strikes the rival king a single blow that lays him low. Hafgan begs Pwyll to strike again and end his suffering, but Pwyll remembers Arawn's warning and refuses. Hafgan dies slowly, and his followers carry him away. Pwyll then summons the men of both kingdoms and takes their allegiance, uniting Annwn under a single rule for the first time in memory.

Arawn and Pwyll meet again at Glyn Cuch and restore each other to their true forms. Arawn returns to his court and discovers that his wife is delighted to see him, for she had grieved that he had shown no interest in her bed for the past year. Arawn realises the extent of Pwyll's self-mastery and is glad. He sends Pwyll back to Dyfed with gifts of greyhounds, horses, and hawks, and the two kingdoms become fast friends. From that day forward, Pwyll is known as Pwyll Pen Annwn, Pwyll Head of Annwn, a mortal prince who bears the title of the Otherworld king.

Arawn appears again by allusion in the Fourth Branch of the Mabinogi, where Pryderi, Pwyll's son, has received a gift of otherworldly pigs from Arawn. These pigs become the cause of a war between Dyfed and Gwynedd when the trickster Gwydion steals them, leading to Pryderi's death. The gift that Arawn gave in friendship thus becomes, through the malice of others, the seed of tragedy for the house of Pwyll. In later Welsh tradition, the role of king of Annwn passed to Gwyn ap Nudd, the lord of the Tylwyth Teg and leader of the Wild Hunt, and Arawn's name faded from active story. But the old saying from Cardigan remained: long is the day, and long is the night, and long is the waiting of Arawn, a proverb used by Welsh speakers for centuries to describe any endless delay or patient endurance.