James I abolished Irish land customs in 1605 and by 1613 Brehon law was superseded. All Ireland was placed under English law. Even though remaining marginally loyal to the crown, locals awaiting the confiscation of Ulster persecuted the earls. Rumors of a new rebellion led them to flee Ireland for good. Their departure in 1607 was known as the Flight of the Earls and to many signaled the end of Lowland / Gaelic Ireland.

In 1613, under Charter from James I, the city of London became responsible for the settlement of Derry, which then gained the prefix 'London', and between 1614 and 1618 Londonderry's walls were built. St. Augustine's Abbey, for its church, but between 1628 and 1633 a new cathedral was built, in Planters' Gothic style, at the head of the town in the south-east corner of the defence work. Throughout the eighteenth century Derry, like the rest of Ireland, was to suffer the economic stagnation that a system of absentee owners imposed. The Earl Bishopric of Derry is thought to derive from Suffolk. James I died and was succeeded by his son Charles I in 1625. The graces never were honored and laws persecuting Catholics were enacted by the Dublin Parliament. Lord Wentworth, Earl of Strafford became the king's representative in Ireland. Under Strafford most of Connaught and much of Munster were confiscated for the crown.

King James, conceiving the citizens of London to be the ablest body to undertake the establishment of a Protestant colony in the forfeited territory, directed overtures to be made to the municipal authorities; and on Jan. 28th, 1609, articles of agreement were entered into between the Lords of the Privy Council and the Committees appointed by act of Common Council. On the part of the citizens it was stipulated that they should expend £20,000 on the plantation; and on the other hand the Crown was to assign to them entire possession of the county of Coleraine, consisting of Antrim and Armagh, and the towns of Coleraine and Derry, with extensive lands attached, excepting 60 acres of of every 1000 for church lands and certain portions to be assigned to three native Irish gentlemen. To this extensive grant the king added the woods of Glenconkene and Killetragh, and ordained that the whole should be held with the amplest powers and privileges such as the patronage of the churches, admiralty jurisdiction on the coasts, the fishery of the two great rivers and all other streams, &c. For the management of this new branch of their affairs the Common Council elected a body of twenty-six, consisting, as at present, a governor, deputy-governor, and assistants, of whom one half retire every year, and their places are supplied by a new election.

In 1613, this company or court was incorporated by royal charter, under its present style of "The Society of the Government and Assistants of London of the New Plantation in Ulster, within the Realm of Ireland;" but is commonly known as the "Irish Society;" and was invested with all the towns, castles, lordships, manors, lands, and hereditaments given to the city, which were erected by the charter into a distinct county to be called "the County of Londonderry." The sum of £40,000 having now been expended on the plantation, it was deemed most advantageous to divide the territorial possessions of the Society into twelve equal portions, which were appropriated by lot to each of the twelve chief companies of the city, and so many of the smaller companies joined as made by their total contributions a twelfth of the entire sum. The twelve chief companies were the Mercers, Grocers, Drapers, Fishmongers, Goldsmiths, Skinners, Merchant Tailors, Haberdashers, Salters, Ironmongers, Vintners, and Clothworkers; and in their respective proportions is now included the chief part of the county. The houses and lands in the city of Londonderry and the town of Coleraine, with their woods, fisheries and ferries, (except that at the estuary of the Foyle, connecting the county with that of Donegal, which belonged to the Chichesters), not being susceptible of division, were retained by the Society, who were to receive the profits, and account for them to the twelve chief companies.

In 1616, information was received by Sir Thomas Philips of Newtown Limavady of a design formed by the Irish to surprise Londonderry and Coleraine, which being communicated to the Irish Government effectual measures were adopted for its prevention on the communication of the intelligence to the Irish Society instructions were immediately issued by it to the twelve companies to furnish arms and accoutrements to be transmitted by the keeper of Guildhall for the better defence of the plantation, the prompt execution of which preserved the colony and gave new vigour to the exertions to stock it with English and Scotch settlers. About the same period directions were also issued to the companies to repair the churches, to furnish each of the ministers with a bible, common prayer book and communion cup, and to send thither a stipulated number of artisans; the trades thus introduced were those of weavers, hat makers, locksmiths, farriers, tanners, fellmoungers, ironmongers, glassblowers, pewterers, fishermen, turners, basketmakers, tallow-chandlers, dyers and curriers.

The Salters company erected glasshouses at Magherafelt, and iron works were opened on the Mercers proportion near Kilrea which were carried on until timber faded for fuel. Notwithstanding the disbursement of large sums of money, at length amounting to £60,000, continued dissatisfaction was expressed by the Crown at the mode in which the stipulations of the society were fulfilled: in 1632 the whole county was sequestered; and in 1637, the charter was cancelled and the county seized into the king's hands. Parliament, however, decreed the illegality of these proceedings; Cromwell restored the Society to its former state; and on the Restoration, Chas. II. granted it a new charter nearly in the same words as that of James, under which its affairs have ever since been conducted. Of the twelve principal companies, all retain their estates except four: viz., the Goldsmiths, Haberdashers, Vintners, and Merchant Tailors, who at various periods disposed of their proportions to private individuals. The Goldsmiths share was situated mostly within the liberties of Derry, south east of the Foyle; that of the Haberdashers was around Aghanloo and Boyevagh. The Vintners had Bellaghy and the Merchant Tailors proportion was Macosquin. The proportions are now held in perpetuity by the Marquess of Waterford, the Richardsons, the Ponsonbys, the Alexanders, and the heirs of the late Right Hon. Thomas Conolly. Of the estates now belonging to the other eight companies, the Mercers have Kilrea and its neighbourhood; the Grocers, Muff and its dependencies; Moneymore, and its rich and improved district belongs to the Drapers; the Fishmongers have Ballykelly; Dungiven belongs to the Skinners; Magherafelt to the Salters; Aghadowey to the Ironmongers; and Killowen, forming part of the borough of Coleraine, to the Clothworkers; all are under lease, except those of the Drapers, Mercers, and Grocers, which are managed by agents, deputed by these respective companies.

The first intimation of the intended insurrection in 1641 came from Moneymore, in this county, through Owen O'Conolly, an Irish Protestant, in time to save Dublin, but not to prevent the explosion of the plot in the north. On the first day of the explosion Moneymore was seized by the Irish, and Maghera and Bellaghy, then called Vintners-town, burned, as were most of the other towns and villages throughout the county. On the termination of the war the county and the city fell under the dominion of the parliament, and Sir Charles Coote and Governor Hunks ruled there with great severity. From the restoration to the revolution, the county affords few materials for history; the siege of Londonderry, one of the most striking events of the latter period, more properly belongs to the history of Londonderry city.