Oxygen (O2) is a crucial element for physiological functioning in mammals. In particular, brain function is critically dependent on a minimum amount of circulating blood levels of O2 and both immediate and lasting neural dysfunction can result following anoxic or hypoxic episodes. Although the effects of deficiencies in O2 levels on the brain have been reasonably well studied, less is known about the influence of elevated levels of O2 (hyperoxia) in inspired gas under atmospheric pressure. This is of importance due to its typical use in surgical anesthesia, in the treatment of stroke and traumatic brain injury, and even in its recreational or alternative therapeutic use. Using local field potential (EEG) recordings in spontaneously breathing urethane-anesthetized and naturally sleeping rats, we characterized the influence of different levels of O2 in inspired gases on brain states. While rats were under urethane anesthesia, administration of 100% O2 elicited a significant and reversible increase in time spent in the deactivated (i.e., slow-wave) state, with concomitant decreases in both heartbeat and respiration rates. Increasing the concentration of carbon dioxide (to 5%) in inspired gas produced the opposite result on EEG states, mainly a decrease in the time spent in the deactivated state. Consistent with this, decreasing concentrations of O2 (to 15%) in inspired gases decreased time spent in the deactivated state. Further confirmation of the hyperoxic effect was found in naturally sleeping animals where it similarly increased time spent in slow-wave (nonrapid eye movement) states. Thus alterations of O2 in inspired air appear to directly affect forebrain EEG states, which has implications for brain function, as well as for the regulation of brain states and levels of forebrain arousal during sleep in both normal and pathological conditions. NEW & NOTEWORTHY We show that alterations of oxygen concentration in inspired air biases forebrain EEG state. Hyperoxia increases the prevalence of slow-wave states. Hypoxia and hypercapnia appear to do the opposite. This suggests that oxidative metabolism is an important stimulant for brain state.