Two timely Ryan Clarke saves ended Wrexham’s mini FA Cup adventure in a pulsating encounter in front of the TV cameras.
His name-sake, Wrexham midfielder Joe put Andy Morrell’s men ahead with a thumping 29th minute volley.
However, for all of Wrexham’s first half dominance Oxford turned the tables in the second half and they own much of that to goalkeeper Clarke.
He denied Johnny Hunt – seeking a fourth goal in as many games – with a crucial block in the first minute of the second half.
United, sitting pretty at the top of League Two, counted their blessings and stunned the Racecourse with two goals in as many minutes, James Constable (54) and Ryan Williams (56) taking advantage of some slack defending.
Then in stoppage time Clarke got the faintest of touches to turn substitute Rob Ogleby’s speculative shot around the post and that was enough to seal his side a Third Round trip to Charlton Athletic.
Reds boss Morrell made wholesale changes to the experimental side that defeated Gresley in the FA Trophy.
A strong XI included top scorer Andy Bishop who returned after serving a three match ban, whilst Joe Anyinsah declared his fitness to take a place on the bench after several weeks out.
Wrexham began brightly in front of the BT Sport cameras and got close to the opening goal when Jay Harris volleyed just wide in the fourth minute.
The hosts dominated possession before Oxford threatened, but Johnny Mullins’ shot was tipped onto the bar by Coughlin after 22 minutes.
Two minutes after Andy Coughlin clung onto a stinging Danny Rose effort Wrexham were ahead.
Skipper Dean Keates whipped the ball in to the far post and Joe Clarke crashed his volley past Ryan Clarke as the Racecourse erupted.
Oxford hit back with another surging run from the dangerous Williams before Mullins scuffed a shot at goal from 15 yards.
Just 20 seconds of the second half had elapsed when Hunt wasted a fabulous chance to double Wrexham’s lead.
The ball was allowed to bounce through a static United rear-guard but Clarke was quickly off his line to block Hunt’s drive from six yards.
That missed chance was certainly costly as United turned the game on its head with two quick-fire goals.
Constable stroked home the equaliser from Dave Kitson’s pass before Williams headed past an exposed Coughlin after a long Scott Davies throw-in was glanced into his path.
The double blow knocked Wrexham completely out of kilter and Reds boss Morrell knew it – he sent on Rob Ogleby and Adrian Cieslewicz in a bid to revive his side’s fortunes.
With six minutes remaining Jay Harris blasted an audacious effort from 35 yards just wide before United’s Scott Davies tried his luck from a similar range.
In the first of three minutes of added time Ogleby’s hopeful shot from just inside the box was tipped around the post by Clarke and with it went Wrexham’s chance of a replay.
Wrexham: Coughlin; Carrington, Artell, Wright, Ashton; Harris, Keates (Morrell 82), J Clarke; Ormerod (Cieslewicz 65), Bishop, J Hunt (Ogleby 64).
Subs: Mayebi, Clowes, Evans, Anyinsah.
Oxford United: R Clarke, Bevans, Mullins, D Hunt, Newey; Williams (Smalley 86), Rose, Davies, Ruffels; Kitson, Constable (Long 88).
Subs: Crocombe, Marsh, Lynn, Shama, O’Dowda.
Referee: Gavin Ward (Surrey)
Oxford United: Kitson (92, foul)