The evolution of oxygenic photosynthesis was the most important geochemical event in Earth history, causing the Great Oxidation Event (GOE) ∼2.4 b.y. ago. However, evidence is mixed as to whether O2 production occurred locally as much as 2.8 b.y. ago, creating O2 oases, or initiated just prior to the GOE. The biogeochemical dynamics of possible O2 oases have been poorly constrained due to the absence of modern analogs. However, cyanobacteria in microbial mats in a perennially anoxic region of Lake Fryxell, Antarctica, create a 1–2 mm O2-containing layer in the upper mat during summer, providing the first known modern analog for formation of benthic O2 oases. In Lake Fryxell, benthic cyanobacteria are present below the oxycline in the lake. Mat photosynthesis rates were slow due to low photon flux rate (1–2 µmol m−2 s−1) under thick ice cover, but photosynthetic O2 production was sufficient to sustain up to 50 µmol O2 L−1, sandwiched between anoxic overlying water and anoxic sediments. We hypothesize that Archean cyanobacteria could have similarly created O2 oases in benthic mats prior to the GOE. Analogous mats may have been at least partly responsible for geological evidence of oxidative weathering prior to the GOE, and habitats such as Lake Fryxell provide natural laboratories where the impact of benthic O2 oases on biogeochemical signatures can be investigated.