Osman Bey, who became the tribal chief instead of his father in 1281, according to one view, was the Seljuk Sultan II. With the edict of Gıyâseddin Mes’ûd stating that Söğüd and its surroundings were allocated to him in 1284, and the white flag, tug and mehterhane he gave as a gift, he became a triadmaster. The conquest of Karacahisar in 1288 or 1291 and Dursun Fakih giving a sermon on his behalf showed that Osman Bey had gained semi-independence.
The Byzantines, alarmed when Osman Gazi conquered the Byzantine border cities one by one, prepared a raid on the occasion of a wedding to eliminate him. Responding to the raid with a raid, Osman Bey conquered Yarhisar and Bilecik in 1299 and transferred the center of the principality to Bilecik and married Nilüfer (Holofura), the daughter of Yarhisar Tekfurun, who caused the strife, to his son Orhan. This date was accepted as the foundation year of the Ottoman Empire for the reasons explained earlier. On January 27, 1300, the Seljuk Sultan III. Osman Bey became an independent marshal after Ala’addin Keykubad sent tabl, alem and tug, which were the signs of the sultanate, to Osman Bey with an edict. In 1301, he founded Yenişehir, close to Bursa, and transferred the sultanate here. Meanwhile, he did not forget those who helped him in all these conquests and gave Eskişehir to his brother Gündüz Bey; Sultanönü to his son Orhan Bey; Hasan Alp’a Yarhisar; He gave Bilecik to Sheikh Edebalı and İnegöl to Turgut Alp and took Edebalı’s grandson Ala’addin with him. When the Seljuk State was abolished by the Ilkhanid ruler Ahmed Gazan in 1308, the Ottoman State became completely independent. With the conversion of Harmankaya Judge Köse Mihal Bey to Islam in 1313, Mekece, Akhisar and Gölpazarı fell into the hands of the Ottomans. Osman Bey, who was not seen around much since 1320, handed over the principality to his son Orhan Bey in 1324. Osman Bey, who died at the age of 67 before seeing the conquest of Bursa in February 1324, was taken from Söğüd, where he was temporarily buried, on his will, and was buried in Gümüş Künbed in 1326, 2.5 years later.