Umar was born in Mecca to the Banu Adi clan, which was responsible for arbitration among the tribes. His father was Khattab ibn Nufayl and his mother was Hantama bint Hisham, from the tribe of Banu Makhzum. In his youth he used to tend to his father's camels in the plains near Mecca. His merchant father was famed for his intelligence among his tribe.

While under his leadership, the empire expanded and he also began to build a political structure that would hold together the vast empire. He undertook many administrative reforms and closely oversaw public policy. He established an advanced administration for the newly conquered lands, including several new ministries and bureaucracies, and ordered a census of all the Muslim territories. During his rule, the garrison cities (amsar) of Basra and Kufa were founded or expanded. In 638, he extended and renovated the Masjid al-Haram (Grand Mosque) in Mecca and Al-Masjid al-Nabawi (Mosque of the Prophet) in Medina.  Umar also ordered the expulsion to Syria and Iraq of the Christian and Jewish communities of Najran and Khaybar. He also permitted Jewish families to resettle in Jerusalem, which had previously been barred from all Jews. He issued orders that these Christians and Jews should be treated well and allotted them the equivalent amount of land in their new settlements. Umar also forbade non-Muslims to reside in the Hejaz for longer than three days. He was first to establish the army as a state department.  Umar was founder of Fiqh, Islamic jurisprudence. He is regarded by Sunni Muslims to be one of the greatest Faqih. Umar as a jurist started the process of codifying Islamic Law.  In 641, he established Bayt al-mal, a financial institution and started annual allowance for the Muslims. As a leader, 'Umar was known for his simple, austere lifestyle. Rather than adopt the pomp and display affected by the rulers of the time, he continued to live much as he had when Muslims were poor and persecuted. In 638, his fourth year as caliph and the seventeenth year 17 since the Hijra, he decreed that the Islamic calendar should be counted from the year of the Hijra of Muhammad from Mecca to Medina.

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