Charlton were eliminated from the Checkatrade Trophy after losing 3-0 in a penalty shoot-out.
It was the first time the Addicks had been involved in a penalty decider since the new ABBA system was introduced.
Both sides fielded strong sides, but Karl Robinson switched to a 3-5-2 system. Anfernee Dijksteel, Ezri Konsa and Johnnie Jackson were the centre-backs, with Mark Marshall and Jay Dasilva deployed as wing backs.
Karlan Ahearne-Grant partnered Josh Magennis up front but, worryingly, had to be substituted just past the half-hour mark after picking up a knock.
It was a disappointing end to an evening that had begun so brightly for the young attacker.
He gave Charlton the lead after just seven minutes. Oxford lost the ball in midfield, and the Addicks switched it to Ahearne-Grant on the left.
The in form striker cut in, drifted past two defenders and rifled a shot into the far corner of
Scott Shearer’s net.
Robinson’s side went on to dominate proceedings in the opening period but were pegged back nine minutes after the interval.
Charlton lost the ball in the middle of the park. Oxford played it forward to Wes Thomas who beat Dillon Phillips to restore parity.
Both sides had chances, with the better ones falling to the hosts. Substitute, Stephy Mavididi,
was inches away from snatching victory in stoppage time, but the game went to penalties.
It was the first time an ABBA format penalty shoot-out had been staged at The Valley. The kicks were taken at the Covered End, with the Addicks going first.
Johnnie Jackson had his effort saved by Shearer, then both Alex Mowatt and Jon Obika converted for Oxford.
Next up was Mavididi who had his shot saved, before Reeco Hackett-Fairchild blazed over the bar.
Dillon Phillips saved Ryan Ledson’s spot-kick to keep his side in the game, but the respite was short lived.
Agon Mehmeti tucked his kick away to send his side into the next round.
Robinson will feel aggrieved that his side failed to win a game in which they had no fewer than 24 shots.
Charlton: Phillips, Dijksteel, Konsa, Jackson; Marshall, Reeves, Kashi (Lapslie, 60), Aribo, Dasilva; Ahearne-Grant (Hackett-Fairchild, 34), Magennis (Mavididi, 64)
Subs (not used): Amos, Holmes, Lennon, Mascoll.
Goal: Ahearne-Grant 7.
Oxford: Shearer; Carroll, Martin, Williamson, Ricardinho (Tiendalli 46); Van Kessel (Napa, 57), Mowatt, Ledson, Payne; Thomas (Mehmeti 75), Obika.
Subs (not used): Stevens, Henry, Fernandez, Raglan.
Goal: Thomas 54.
Booked: Carroll 59 (foul).
Referee: Andy Haines (Tyne & Wear).
Attn: 1,146 (122 Oxford).