We describe how environmental context can help determine whether oxygen (O ) detected in extrasolar planetary observations is more likely to have a biological source. Here we provide an in-depth, interdisciplinary example of O biosignature identification and observation, which serves as the prototype for the development of a general framework for biosignature assessment. Photosynthetically generated O is a potentially strong biosignature, and at high abundance, it was originally thought to be an unambiguous indicator for life. However, as a biosignature, O faces two major challenges: (1) it was only present at high abundance for a relatively short period of Earth's history and (2) we now know of several potential planetary mechanisms that can generate abundant O without life being present. Consequently, our ability to interpret both the presence and absence of O in an exoplanetary spectrum relies on understanding the environmental context. Here we examine the coevolution of life with the early Earth's environment to identify how the interplay of sources and sinks may have suppressed O release into the atmosphere for several billion years, producing a false negative for biologically generated O . These studies suggest that planetary characteristics that may enhance false negatives should be considered when selecting targets for biosignature searches. We review the most recent knowledge of false positives for O , planetary processes that may generate abundant atmospheric O without a biosphere. We provide examples of how future photometric, spectroscopic, and time-dependent observations of O and other aspects of the planetary environment can be used to rule out false positives and thereby increase our confidence that any observed O is indeed a biosignature. These insights will guide and inform the development of future exoplanet characterization missions. Key Words: Biosignatures-Oxygenic photosynthesis-Exoplanets-Planetary atmospheres. Astrobiology 18, 630-662.