He was loaned to Carlisle United of the Third Division in October 2002, making his first-team debut on the 5th by playing the full 90 minutes of a 2–1 home defeat to Torquay United. He scored once for the team in a league fixture against Macclesfield Town on 19 October to ensure a 2–2 draw at Moss Rose, and twice against Oldham Athletic in the Football League Trophy three days later in a 4–3 away victory. On returning to Everton in January, he made his Premier League debut in a 4–3 defeat at Tottenham Hotspur on 12 January 2003, replacing Li Tie in added time. His only other Everton appearance of the season was his Goodison Park debut on 26 April, replacing Steve Watson at the end of a 2–1 win over Aston Villa.

Osman was granted a one-year extension to his Everton contract in the summer of 2003, but failed to break into the first team until the end of the 2003–04 season. Instead, he was again loaned out, this time to Derby County in the First Division. He had an integral role in Derby’s successful bid to avoid relegation, and manager George Burley tried to buy him from Everton. Instead, Osman returned to his parent club with three matches remaining in Everton’s season. Manager David Moyes gave Osman his first start on 1 May 2004 at Wolverhampton Wanderers, and he headed Everton into the lead within three minutes from a James McFadden cross, although they eventually lost 2–1.

His start to the 2007–08 season began with two goals in consecutive wins against Wigan Athletic and Tottenham Hotspur. His appearance in the starting 11 for Everton was threatened by the arrival of South African loan-signing Steven Pienaar. Osman scored his first goal in a UEFA competition on 25 October 2007, Everton’s second in a 3–1 UEFA Cup group stage win over Greek club Larissa at Goodison Park. His shot from 22 yards helped Everton to the top of the group and was voted Everton’s Goal of the Season. Osman scored both goals in Everton’s 2–0 win over Fulham on the final day of the season to secure Everton 5th place in the Premier League for 2008–09. At the end of the season, he started in the 2009 FA Cup Final at Wembley Stadium, being replaced by Dan Gosling in the 82nd minute of the 2–1 defeat to Chelsea.

The following season Osman captained Everton for the first time in a League Cup match away to Hull City scoring once in the 4–0 victory. In April 2010, Osman was named man of the match in two consecutive matches. He also ended the 2010–11 Premier League season with four goals.

Osman represented England at U16 level in the 1997–98 season. On 14 November 2012, at the age of 31, Osman earned his first senior call-up to the England squad for a friendly fixture against Sweden. Osman started in central midfield for his country in a 4–2 defeat against Sweden, in which he played the full 90 minutes. On 31 January 2013, Osman was named in the England squad for the second time for the friendly fixture against Brazil on 6 February 2013, though he was left on the substitutes’ bench for the match. Osman received his first competitive international call up after being named in the England squad on 14 March 2013 for the World Cup qualifiers against San Marino and Montenegro. Osman made his competitive England debut against San Marino.

In March 2013, in a match against reigning champions Manchester City, Osman made his 300th Everton start. A long-range goal scored in the match was his eighth of the season, a personal record, and his 50th goal for the club. In December, Osman also scored on his 300th Premier League appearance during a 4–1 win over Fulham. Later in the same month he broke David Unsworth’s Everton Premier League appearance record, reaching 303 appearances. He featured in every league match in the 2013–14 season, the first under manager Roberto Martínez, the only Everton player to do so. To mark his long service, a testimonial match against FC Porto was held as part of Everton’s pre-season schedule for the 2014–15 season.

On 6 November 2014, he signed a one-year contract extension to keep him at Everton until the summer of 2016. Later that day, he opened the scoring in Everton’s 3–0 UEFA Europa League group stage win against Lille. He scored on his 400th appearance for the club, netting the winner in a 2–1 victory over West Ham United His contract expired at the end of 2015–16, and Osman was released by Everton. He retired from playing soon after.