The former Manchester City and Hibs wideman has endured a stop-start season and has only played 35 minutes of league football across three appearances since the start of November.
U’s boss Karl Robinson said: “This is a fantastic signing for this football club.
"He is such a creative player but he has also grown up in a magnificent youth system and then this season he has been part of a very good Rangers side.
"For him to make a move to Oxford at this stage of his career speaks volumes about the reputation we have as a club for helping talented young player develop and get even better.”
Barker added: “It’s a big move for me but I am really looking forward to it. Karl was a big part of my decision but I have also known Cameron Brannagan for a long time and I spoke to Kemar Roofe and they both told me what a brilliant club Oxford is and how well they have been playing.
"I like the way they play the game, I see a team on a fantastic run of form and I just can’t wait to be part of that and hopefully help them push on from the position they are currently in.”
Meanwhile, Barker’s Ibrox team-mate George Edmundson has joined Derby County on loan until the end of the season and Gers youngster Umaro Balde has left the club by mutual consent.