A timely restoration of the ruptured blood vessel network in order to deliver oxygen and nutrients to the fracture zone is crucial for successful bone healing. Indeed, oxygen plays a key role in the aerobic metabolism of cells, in the activity of a myriad of enzymes as well as in the regulation of several (angiogenic) genes. In this paper, a previously developed model of bone fracture healing is further improved with a detailed description of the influence of oxygen on various cellular processes that occur during bone fracture healing. Oxygen ranges of the cell-specific oxygen-dependent processes were established based on the state-of-the art experimental knowledge through a rigorous literature study. The newly developed oxygen model is compared with previously published experimental and in silico results. An extensive sensitivity analysis was also performed on the newly introduced oxygen thresholds, indicating the robustness of the oxygen model. Finally, the oxygen model was applied to the challenging clinical case of a critical sized defect (3mm) where it predicted the formation of a fracture non-union. Further model analyses showed that the harsh hypoxic conditions in the central region of the callus resulted in cell death and disrupted bone healing thereby indicating the importance of a timely vascularization for the successful healing of a large bone defect. In conclusion, this work demonstrates that the oxygen model is a powerful tool to further unravel the complex spatiotemporal interplay of oxygen delivery, diffusion and consumption with the several healing steps, each occurring at distinct, optimal oxygen tensions during the bone repair process. ; Peer reviewed