Olwen was born the daughter of Ysbaddaden Pencawr, the chief giant of the land, a monstrous figure whose eyelids drooped so low that they had to be propped up with forks and who threw poisoned stone-spears at anyone who approached his castle. A prophecy had foretold that Ysbaddaden would die whenever his daughter married, so the giant kept Olwen hidden and guarded, determined that no suitor would ever win her hand. Her fate became entangled with that of Culhwch, the son of King Cilydd, who was born in a pig-run after his mother Goleuddydd lost her reason during pregnancy and wandered the wilds. Culhwch's stepmother, the widow of King Doged whom Cilydd had killed, placed a curse on the boy when he refused to marry her own daughter: he would love no woman but Olwen, daughter of Ysbaddaden, a curse she believed would doom him to never marry at all.

Culhwch set out for the court of his cousin King Arthur at Celliwig in Cornwall, one of the earliest known mentions of Arthur's court in any literature. Arthur agreed to help and sent scouts to find Olwen, but after a year they returned empty-handed. Culhwch then gathered a party of Arthur's finest warriors, including Cei, the sharp-tongued seneschal who would later become Sir Kay, Bedwyr, the one-handed warrior who would become Sir Bedivere, and Gwalchmei, Arthur's nephew who would become Sir Gawain. They travelled until they reached the house of the shepherd Custennin, whose wife was the sister of Culhwch's mother. The shepherd's wife warned them that no man who sought Olwen ever returned alive, but she revealed that Olwen came to their house every Saturday to wash her hair. When the appointed day arrived, Olwen appeared. She wore a robe of flame-red silk and a torque of red gold at her neck, with pearls and rubies upon it. Her head was yellower than the flower of the broom, her flesh whiter than the foam of the wave, her palms and fingers whiter than the shoots of the marsh trefoil from amidst the fine gravel of a welling spring. Her breasts were whiter than the breast of a white swan, her cheeks redder than the reddest foxglove. Four white trefoils sprang up behind her wherever she walked, and for that reason she was called Olwen. Culhwch fell instantly in love, and Olwen, seeing his devotion, agreed to his suit but warned him that he must obtain her father's permission and must not flinch from any conditions set.

The next morning Culhwch and Arthur's men arrived at Ysbaddaden's castle. For three days the giant threw poisoned stone-spears at them as they turned to leave, and for three days they caught the spears and hurled them back, wounding the giant in the leg, the belly, and the eye. At last, weakened and cornered, Ysbaddaden agreed to hear Culhwch's request. He consented to the marriage on one condition: Culhwch must complete a series of seemingly impossible tasks, about forty in number, ranging from the trivial to the monstrous. He must plough a barren field, obtain honey nine times sweeter than the first swarm, and win the razor, comb, and shears that lay between the ears of Twrch Trwyth, a former Irish king who had been transformed into a giant boar by God for his sins. The hunt for Twrch Trwyth became the centrepiece of the quest. Arthur and his warriors pursued the boar and his seven piglets across Ireland, then across the sea to Wales, then to Cornwall, losing many men in the chase. They seized the razor and scissors at the mouth of the River Severn and the comb in Cornwall, while the boar itself was driven into the sea and drowned.

With the grooming implements won, Culhwch and his company returned to Ysbaddaden. The giant's final task was the killing of the Black Witch, daughter of the White Witch, a feat that Arthur himself accomplished after several of his heroes had been driven squealing from her cave. At last, with all tasks complete, Culhwch and his men fell upon Ysbaddaden. They shaved his beard and cut his hair down to the bone, and in the process the giant was killed, fulfilling the prophecy that had haunted him since Olwen's birth. The castle was stormed, the tyrant fell, and Olwen was free to marry the man who had moved heaven and earth to win her.

Olwen and Culhwch were married and remained faithful to one another for the rest of their lives. The tale of their courtship stands as the earliest known Arthurian romance, predating the French chivalric tradition by centuries, and it preserves a purely Celtic form of the story that later Continental writers would never match. The story belongs to the international folktale type known as "the giant's daughter," a pattern that stretches from the Welsh Mabinogion to the Greek tale of Jason and Medea, in which a hero must win a bride by completing impossible tasks set by her fearsome father. In a later Welsh folktale called Einion and Olwen, a shepherd named Einion travelled to the Otherworld to marry Olwen, and their son was named Taliesin, the famous bard. The white trefoils that spring from her footsteps have made her an enduring symbol of beauty and innocence in Welsh culture, and her name still echoes in the landscape and the imagination of Britain.