Warning: Wikipedia contains spoilers.
Oz was introduced as a romantic interest for the character of Willow Rosenberg. His most notable characteristic is a detached and taciturn manner. It was later eventually reavealed that Oz was a traditional, full-moon based werewolf, leading ultimately to his character leaving the show to seek a cure for his lycanthropy, and to prevent potential harm to Willow and others.
He returned near the end of the 4th season, in the episode New Moon Rising, having (as he thought) found a cure in Tibet. However, it transpired that although the moon no longer affected him, he could still be transformed into a werewolf due to anger or other strong emotions.
Furthermore, since Willow's romantic attentions had turned to Tara Maclay, Oz once again left, apparently for good.