Construction was started in the 1770s by James Brindley as a way to link the industrial English Midlands to London via the Thames, fianancial problems meant that the canal did not officially open until 1790. At its height it was one of the most important and profitable transport links in Britain. Run by the Oxford Canal Company, it mostly transported coal and other commodities.
Its importance was greatly reduced by the completion of the rival Grand Union Canal in the early 19th century, which had a much more direct route between the Midlands and London. Its importance was further reduced by the coming of the Railways from the 1830s onwards.
It was originally built as a contour canal which meant it twisted around hills to keep to a level contour. In the 1820s the northern section of the canal between Braunston and Coventry was straightened out and shortened in an attempt to compete with the railways.
Like most of the British narrow canal system the Oxford Canal suffered from the rapid decline in freight traffic carried on the canals in the 1950s and 1960s but pleasure boating grew to replace it ensuring the canal's survival to this day.