The oxygen (O2) sensor is the primary measurement device for fuel control computations in your car to know if the engine is too rich or too lean. The O2 sensor is active anytime it is hot enough, but the computer only uses this information in the closed loop mode. Closed loop is the mode where all engine control sensors including the O2 sensor are used to get best fuel economy, lowest emissions, and good power.
An O2sensor is a chemical generator. It is constantly making a comparison between the oxygen inside the exhaust manifold and air outside the engine. If this comparison shows little or no oxygen in the exhaust manifold, a voltage is generated. The output of the sensor is usually between 0 and 1.1 volts. All spark combustion engines need the proper air fuel ratio to operate correctly. For gasoline this is 14.7 parts of air to one part of fuel. When the engine has more fuel than needed, all available oxygen is consumed in the cylinder and gasses leaving through the exhaust contain almost no oxygen. This sends out a voltage greater than 0.45 volts. If the engine is running lean, all fuel is burned, and the extra oxygen leaves the cylinder and flows into the exhaust. In this case, the sensor voltage goes lower than 0.45 volts. Usually the output range seen seen is 0.2 to 0.7 volts.