Making professions of loyalty to the queen of England, he sought to strengthen his position by alliance with the O'Donnells, MacDonnells and MacQuillans. But his conduct giving rise to suspicions, an expedition under the earl of Essex was sent against him, which met with such doubtful success that in 1575 a treaty was arranged by which O'Neill received extensive grants of lands and permission to employ three hundred Scottish mercenaries.
In 1578 he was created baron of Clogher and earl of Clanconnell for life; but on the outbreak of rebellion in Munster his attitude again became menacing, and for the next few years he continued to intrigue against the English authorities. The latter, as a counterpoise to Turlough, supported his cousin Hugh, brother of Brian, whom Turlough had murdered. After several years of rivalry and much fighting between the two relatives, Turlough resigned the headship of the clan in favour of Hugh, who was inaugurated O'Neill in 1593.