During the caliphate of Umar, Uthman remained at Madina as his Adviser. Umar did not allow the Companions including Uthman to leave Madina, nor did he employ them for the purposes of the State. Umar is reported to have said that he did not employ such eminent persons to high offices because of their virtues. He said that he did not appoint them to high offices lest for any lapse they might lose the eminence that they enjoyed.

During the time of Umar considerable wealth flowed into the public treasury. Heretofore the practice was that all that was received in the treasury was immediately distributed among the people. Uthman advised that instead of such distribution, some amount should be kept in the treasury as reserve for future needs. This advice was accepted by Umar.

In the time of Umar, a controversy arose about the land in conquered lands. The army was of the view that all lands in conquered territories should be distributed among the soldiers of the conquering army. Another view was that lands should remain with the original owners, and the lands whereof the owners left the country should be declared state property. Uthman supported the latter view and this view was ultimately accepted.

At the time of the conquest of Jerusalem the Christians desired that Umar should himself come to Jerusalem to accept the surrender of the city. Uthman was of the view that it was not necessary for the Caliph of the Muslims to go to Jerusalem and that the enemy when defeated would of its own accord surrender the city. There was much force in the view-point of Uthman but in order to win the good will of the Christians, Umar decided to go to Jerusalem to accept the surrender of the city.

In the time of Umar, a severe famine broke out in the country and there was acute shortage of food supply. At that time a large caravan belonging to Uthman, carrying large supplies of food grains arrived in Madina. Traders rushed to the house of Uthman, and tried to prevail upon him to sell the grain to them at profit. Uthman wanted them to indicate the profit they would allow him. The highest bid they could offer was cent per cent profit. Uthman said that he would not sell his goods at a profit less than ten times the original price. The traders said that they could not afford him profit to that extent and that no body could do that. Uthman said that he had already an offer for ten times profit. "Who had made such offer", inquired the traders. Uthman said that God had assured him of ten times profit. Thereafter Uthman distributed the entire stock of food grains among the poor free of cost and expected ten times profit from God.

When Umar died, looking at the dead face of Umar, Uthman said, "Out of us who can equal Umar". That was a great tribute to Umar.