The old covenant referred to in Hebrews 8:6 does not have reference to the covenant of works, according to Owen, because the old covenant (diatheke) "was such a covenant as was a testament also." A testament requires a death, which explains a fundamental difference between the covenant of works and the old covenant. Accordingly, for Owen, the old covenant is "not a covenant properly and strictly so called, but such a one as hath the nature of a testament also [ ... ] the first covenant made with Adam was in no sense a testament also." Owen identifies, as the majority of Reformed theologians did, certain parallels between the covenant of works and the old covenant, and he even maintains that the old covenant "revived, declared, and expressed all the commands of [the covenant of works] in the decalogue." However, he indicates that the moral law was revived declaratively and not covenantally at Sinai. If the Israelites had been placed under the covenant of works, as Adam was, the promise given to Abraham would have been annulled (Gal 3: 17). All of this suggests that the old covenant operated alongside of the covenant of grace and, unlike the covenant of works, was also a testament. Owen aims to remain consistent and therefore argues that the new covenant is not strictly co-extensive with the covenant of grace. During the Old Testament, beginning with the protoevangelium (Gen 3:15), the covenant of grace consisted only in a promise. The "full legal establishment of it, whence it became formally a covenant unto the whole church, was future only." The law given at Sinai became a covenant only with the blood of sacrifices. In the same way, the covenant of grace did not have the formal nature of a covenant or a testament (Heb 9:15-23) until the death of Christ. He adds that the "covenant of grace" implies salvation; "yet by 'the new covenant,' we intend its actual establishment in the death of Christ." This manner of understanding the various covenants in Scripture helps explain not only Owen's position, but also why this debate has historically been covered in confusion.
For Owen, all persons indefinitely considered are guilty before God by virtue of the federal nature of the covenant of works. But, for the elect, they are saved according to the fulfilled promise of the covenant of grace. Framing it this way, Owen advocates a dichotomist reading of redemptive history. However, he also maintains the view that the old and new covenants are real covenants, that is, they are also testaments. Neither the covenant of works nor the covenant of grace, considered simply as promises in the Old Testament, is a testament. Thus there are, properly speaking, only two covenants mentioned in Scripture, the old and the new. The old covenant was confirmed by the death of sacrificed animals; the new was ratified by the death of Christ. Understood this way, one can understand why Owen persists in the opinion, even if it runs counter to the majority, that the old and new covenants "can hardly be accommodated unto a twofold administration of the same covenant." Reconciliation could never come by virtue of the old covenant since it lacked the death of an atoning sacrifice, and was never intended to save the church. Believers in the old covenant were therefore "reconciled, justified, and saved, by virtue of the promise, whilst they were under the [old] covenant." In terms of covenant-testaments, Owen is a dichotomist. In terms of soteric principles, only two covenants could ever save, the covenant of works and the covenant of grace. The idea that Owen holds to a trichotomist reading of redemptive history only works if one allows that the covenant of grace flowers into the new covenant whereas the old covenant is abrogated by the new covenant and remains distinct from the covenants of works and grace.