An oxygen sensor monitors the amount of oxygen (O2) in the exhaust gas. The amount of oxygen in the exhaust gas is a good indicator of engine combustion efficiency and is also the best place to monitor the air to fuel ratio.
Too much oxygen in the exhaust gases indicates a lean mixture. A lean mixture tends to produce more nitrogen oxide pollutants NOx, and in some cases it can cause poor performance including misfire and even engine damage with the engine running too hot. Too little oxygen indicates a rich mixture, which wastes fuel and reduces economy, and the unburned fuel results in excess emissions. Either condition can shorten the life of the expensive catalytic converter.