The station opened on 13 March 1933 as part of the Cockfosters extension. The station did not appear on the original plans to extend the Piccadilly line beyond Finsbury Park, which only provided for seven additional stations.
The station building is a fine example of the architecture Charles Holden built for the Piccadilly Line extensions, with a large and imposing box-shaped ticket hall surrounded by lower structures containing shops. Mirroring proportions found in classical architecture, albeit in a distinctly 20th century structure, the dimensions of the ticket hall are approximately a "double-cube" (its front elevation is roughly twice its height and width). The station is similar to Holden's slightly earlier designs for Sudbury Town and Acton Town stations at the western end of Piccadilly Line. Oakwood Station is a Grade II listed building.
Like other extensions of the London Underground lines, the opening of the Cockfosters extension stimulated the rapid development of new suburbs and much of the open countryside that existed in 1930 when construction started was quickly covered by new housing developments.
In early October 2006 to December 2007, the station underwent an upgrade as part of London Underground's £10billion upgrade to the whole of the London Underground Network. As part of this, a new lift was installed to provide step-free access to the platforms. The Public Address system was also improved, with new information indicators installed on the platforms and inside the ticket hall. In addition 27 new CCTV cameras were installed in the station bringing the total number to 29.
Before the station opened Underground Electric Railways Company of London (forerunner of London Underground) suggested names for it including Oakwood, Merryhills and East Barnet, but it was named Enfield West at opening and renamed Enfield West (Oakwood) the following year.
The station was located in the area of Southgate Council and, following protests from the council, it was eventually renamed Oakwood on 1 September 1946.
Currently a few trains in the early morning and late evening enter/leave service at Oakwood, from Cockfosters Depot (which has an entrance point north of Oakwood station). There is additionally a crossover for trains to reverse, and the possibility of an extra platform built using an existing siding has been mooted to provide extra peak-hour reversing capacity.
A free bus service for Middlesex University students to the nearby Trent Park campus runs from the station. Public buses also run from outside the station - 307 to Barnet, Arkly Hotel, 121 to Enfield Lock and 377 to Ponders End bus garage. A local mini cab firm, Oakwood Cars, operates from the station ticket hall, and when the station is shut operates from a black cab permanently situated in the station's car park.