Graphene is a promising material for sensing applications because of its large specific surface area and low noise. In many applications, graphene will inevitably be in contact with oxygen since it is the second most abundant gas in the atmosphere. Therefore, it is of interest to understand how this gas affects the sensor properties. In this work, the effect of oxygen on the low-frequency noise of suspended graphene is demonstrated. Devices with suspended graphene nanoribbons with a width (W) and length (L) of 200 nm were fabricated. The resistance as a function of time was measured in a vacuum and pure oxygen atmosphere through an ac lock-in method. After signal processing with wavelet denoising and analysis, it is demonstrated that oxygen causes random telegraph signal (RTS) in the millisecond scale, with an average dwell time of 2.9 milliseconds in the high-resistance state and 2 milliseconds in the low-resistance state. It is also shown that this RTS occurs only at some periods, which indicates that, upon adsorption, the molecules take some time until they find the most energetically favorable adsorption state. Also, a slow-down in the RTS time constants is observed, which infers that less active sites are available as time goes on because of oxygen adsorption. Therefore, it is important to consider these effects to guarantee high sensitivity and high durability of gas sensors based on graphene that will be exposed to oxygen during their lifetime.