The game was destined for a draw, only for the U’s, the better side over the course of the game, to secure three valuable points from the penalty spot after Stephen Darby felled Alfie Potter.
Peter Leven duly converted as City slumped to a third league defeat in four games, with the record of not following up a Capital One Cup victory with a league win continuing on a bad day at the office.
The afternoon had started well for the hosts, whose manager Phil Parkinson rejected the chance to talk to managerless Blackpool yesterday.
A calamitous mix-up involving ex-Leeds United defender Michael Duberry and visiting keeper Wayne Brown let in Nakhi Wells, who netted from an acute angle to record his 17th goal of a productive season on 14 minutes.
But three minutes later, Oxford restored parity, courtesy of a 20-yard rocket from Sean Rigg.
After that, the U’s had the better of the opportunities, with keeper Matt Duke, hero of the hour against Villa in midweek, saving well to deny Leven and Potter.
The veteran custodian made a key stop to tip Potter’s header onto the underside of the bar in the second half, but he could do nothing to stop Leven’s spot-kick winner at the death.