Oxford Township was formed from portions of Greenwich Township on May 30, 1754 while the area was still part of Sussex County and was incorporated as one of New Jersey's initial group of townships by an Act of the New Jersey Legislature on February 21, 1798. Mansfield Township became part of the newly formed Warren County on November 20, 1824. Over the centuries since its creation, portions of the township were taken to form Knowlton Township (February 23, 1763), Franklin Township, Harmony Township and Hope Township (all on April 8, 1839), Belvidere (April 7, 1845) and White Township (April 9, 1913).
The origin of the name and the exact date of the township's creation is still in dispute. One source says that the township was named after the university in England, and was formed in either 1753 or 1755, but another source claims that the township was named after an early settler named John Axford, who came to settle in the area with others between 1735 and 1739, and affirms that the township's creation was in 1755.
Oxford Furnace, built in 1741, was the third furnace in Colonial New Jersey and the first constructed at a site where iron ore was mined. Other furnaces used ore extracted from bogs in South Jersey, impure deposits called bog iron. Oxford Furnace operated the longest of any of the Colonial Furnaces, not being "blown out" until 1884. In 1835, it was the site of America's first successful use of the hot blast in which preheated air was blown into the furnace, cutting production time. Though worn down by time, much of the site still stands. Oxford Furnace is listed on the State and the National Register of Historic Places.
The township also is home to a pristine recreation area. What was once built for practical purposes of flood and erosion control is now a quiet lake area known as Oxford Furnace Lake. Named for the first hot blast furnace in America, Oxford Furnace Lake is a cozy area for families to picnic, hike, swim, and enjoy the great outdoors away from a noisy populated area. Kayaking, canoeing, and boating are popular on the clear water, but electric motors only are allowed to maintain a quiet and peaceful retreat. Local anglers boast that the fishing here is some of the best in the region.