A ray of light illuminated Oldfield's future. When Mike left Kevin Ayers' band for good, he worked occasionally as a session guitarist to make ends meet. One of these jobs took him to the backing band for the London production of Hair, the "tribal rock-love musical," for £5 a night. He also played bass for a while in a band led by soul singer Arthur Lewis. The group was going to record at a recently opened studio in a mansion in Shipton-on-Cherwell, 20 miles from Oxford. The Manor recording studios had been built at that time for Richard Branson by Tom Newman, assisted by, among others, Simon Heyworth. The team assembled at The Manor consisted of close friends, and some of their girlfriends were also there, as well as a cook, cleaners, and gardeners. As Mike later commented, "We dealt with all the problems that arose as if we were one big family."

The wonderful atmosphere in the studio and the positive attitude of Newman and Heyworth gave Mike the opportunity to record a new demo based on the same instrumental developments he had been working on for some time. Heyworth and Newman loved and were amazed by Oldfield's range of ideas, and they began a campaign to persuade Branson to release it and let them use the studio for a while to record it. Initially, it seemed that this wasn't the right time; the project would have to wait a bit for the arrival of Simon Draper, a businessman who joined Branson, owner of a chain of record stores, and together they created their own record label: Virgin Records. Draper had extensive musical knowledge, so when he heard Mike's ideas, he immediately supported them.

Mike continued developing and refining his ideas, which he could now give a name to: Tubular Bells, although initially names like Breakfast in Bed (a title suggested by Branson himself) and Opus One were considered. Just when young Oldfield's patience was almost exhausted, Draper offered him a week of studio time at The Manor. A wide selection of instruments were brought into the studio, and the musician worked against the clock during that week, recording more than the first part of the album. The rest emerged during sessions spread over the following months. From the beginning, Mike pushed the limits of the technology of the time to make his recordings; he soon began using 16 tracks. As more and more instruments were added to the recording, the sessions also became a test of Newman and Heyworth's inventiveness, as they mixed everything as best they could. The studio equipment wasn't automated, and all the work was done manually by Mike, since Simon Heyworth and Tom Newman were already using every finger they had at the mixing console; this fostered a closer relationship between producers and artist, allowing Mike to learn a great deal from the two producers.

During the sessions, Mike played more than 20 instruments and approximately 2,000 test tapes were recorded. The music was performed almost entirely by himself, with the exception of Vivian Stanshall, who recorded the vocals for the "master of ceremonies," Jon Field, who played the flute, and Steve Broughton and Mundy Ellis on percussion and vocals, respectively; Newman and Heyworth received credit as co-producers of the album. When the sessions ended, Branson took the Tubular Bells tapes to the MIDEM music industry trade fair in Cannes in January 1973. An executive from the American company Mercury Records told him: "If you add lyrics, I'll buy it for $20,000." Since no one seemed interested in respecting the original concept, Branson and Draper decided to release the album themselves on their new record label, Virgin Records.

Tubular Bells was released on May 25, 1973. It emerged from a recording and mixing process that could have been called "pure art." Critical and public reception was unanimous, hailing it as a "masterpiece." During the launch concert, which Mike almost canceled, there was a standing ovation at Queen Elizabeth Hall, much to the artist's surprise, as he had expected loud boos due to the concert's imperfections.

The British press was perplexed. The influential BBC disc-jockey John Peel wrote that it was "a record that genuinely covered new and unexplored territory," with music that combined "logic with surprise, sunshine with rain." The prestigious music weekly Melody Maker wrote of Tubular Bells that it was "a sweeping work, almost classical in its structure and in the way the theme is established and skillfully worked out." Some interviewers even believed they could list Mike's influences: "The texture of Tubular Bells is quite reminiscent of Sibelius, Vaughan Williams, Michel Legrand, and The Last Night of the Proms," wrote television producer Tony Palmer.

Tubular Bells will always be remembered as a moment in rock music history that captivated the hearts and imaginations of many. It was also a starting point from which to appreciate the many changes and discoveries made by this creator who, from the age of 19, was growing in maturity. The album entered the UK charts in July and soon reached number one. Subsequently, it sold massively throughout Europe and was released in the United States, although things happened more slowly there. The necessary push for the album's sales to skyrocket came when film director William Friedkin, encouraged by Richard Branson, decided to use a 4-minute excerpt in the horror film The Exorcist. Mike wasn't consulted about the association of his work with that film, and he later told reporters that he hadn't been entirely pleased about it. In the UK, a single of Tubular Bells was released featuring a remixed quadraphonic version of the album, a system that required four speakers for full effect. To showcase the wonders of this innovative system, Tubular Bells Quad included a bonus sequence of an airplane that appeared to move around the listener, recorded after The Sailor's Hornpipe.