What does an O2 sensor do on a car?

It detects the amount of oxygen in the exhaust gas compared to the outside air. Most are made with a closed-end tub of cermic zirconia, the zirconia genreates an electrical signal that is sent to the car's main computer (ECU or ECM). The computer adjusts the amount of fuel injected into the engine based partially on the signal coming from the O2 sensor.