The phase stability of Ti 2 AlC upon oxygen incorporation has been studied by means of first-principles calculations. Recent experimental observations of this so-called MAX phase ͑M = early transition metal, A = A-group element, and X = C or N͒ show that the characteristic nanolaminated structure is retained upon oxygen incorporation, with strong indications of O substituting for C. Therefore, a solid solution of C and O on the carbon sublattice has been simulated by the so-called special quasirandom structure method. Through a developed systematic approach, the enthalpy of formation of Ti 2 Al͑C 1−x ,O x ͒ has been compared to all experimentally known competing phases, and has been found favorable for all C to O ratios at the composition of the MAX phase. A negative isostructural formation enthalpy has also been predicted for Ti 2 Al͑C 1−x ,O x ͒. Altogether, the results indicate that a large amount of oxygen, at least up to x = 0.75, might be present in the Ti 2 AlC MAX-phase structure without decomposition of the material into its competing phases. Furthermore, an effect of an increased oxygen content is a corresponding increase in the bulk modulus and a change in electronic properties. These results are of importance for further understanding and identification of possible composition range of the MAX-phase oxycarbide, and hence for the prospect of tuning the material properties by a varying incorporation of oxygen.