A double for Eddie Nketiah helped fire Mikel Arteta's men into the fourth round with a 3-0 victory earlier this month.
But Arsenal were subsequently charged by the Football Association (FA) for failing to control their players after they surrounded referee David Coote protesting for a penalty in the first half.
Arsenal appealed the charge but have now seen their appeal turned down, and will have to pay out the financial sanction.
"Arsenal FC has been fined £40,000 after its players surrounded a match official during the FA Cup tie against Oxford United FC on Monday 9 January 2023," read a statement from the FA.
"Arsenal FC denied an allegation from the FA that the club had failed to ensure its players conducted themselves in an orderly fashion during the 34th minute, and the club also requested a hearing.
"An Independent Regulatory Commission subsequently upheld the allegation and imposed the club's fine.
"Its written reasons for these decisions will be published in due course."
This is the second financial penalty Arsenal have been hit with in January, having also been fined for their conduct against Newcastle United in a Premier League encounter.
On that occasion, the Gunners were also cited for failing to control their players in response to a no-penalty call from the officials in the closing stages of a 0-0 draw.
Gunners players mobbed referee Andy Madley in the 95th minute of the stalemate on January 3, convinced they should have been given a penalty.
Granit Xhaka's cross struck the arm of Jacob Murphy from a few yards away, and Madley opted against awarding a penalty.
Arsenal players reacted furiously, surrounding the official, while head coach Mikel Arteta vented his frustration on the sidelines.
A statement from the Football Association on Friday confirmed their punishment.
It read: "Arsenal have been fined £40,000 for breaching FA Rule E20.1 during their Premier League fixture against Newcastle United on Tuesday, January 3.
"Arsenal admitted they failed to ensure their players conducted themselves in an orderly fashion during the 95th minute. An independent regulatory commission imposed the club's sanction during a subsequent hearing."
Arsenal are also awaiting confirmation of another sanction relating to the FA Cup, having been charged for the same offence after players reacted in a similar fashion to another penalty claim against Oxford United.
Saka was withdrawn in the second half of a victory at the Kassam Stadium on Monday that set up a fourth-round tie at Manchester City.
Arsenal face fierce rivals Tottenham in the Premier League on Sunday and the sight of Saka limping off was a concern for the leaders.
But Gunners manager Arteta revealed the England winger is "fine" ahead of the short trip to do battle with Spurs this weekend.
Arsenal outclassed League One side Oxford following a lacklustre first-half display, Mohamed Elneny opening the scoring before the in-form Eddie Nketiah helped himself to a clinical quickfire double.
Vieira came into the starting line-up as one of seven changes made by Arteta and whipped in a brilliant free-kick for Elneny to break the deadlock with a header, then set up Nketiah for the second goal.
The midfielder has endured a frustrating start to his Gunners career due to injury, but Arteta is in no doubt he will prove to be a shrewd signing.
Arteta told ITV Sport: "He has the quality. He is a really creative player, and he can decide games in the final third. He made a difference."
Nketiah has scored four goals in as many games since the World Cup in the absence of the injured Gabriel Jesus, taking his tally for the season to seven.
Arteta said of the striker's form: "It is what we want from every player. I am delighted. You have to be scoring goals, and he is doing it."
He added: "We have only one [striker]. And to cope for that many months until Gabby's back is not easy. We have to make the most out of the players we've got."
The Premier League leaders failed to register a shot on target in the first half at the Kassam Stadium on Monday after Mikel Arteta made seven changes to his starting line-up.
They demonstrated their superior quality after the break, though, Mohamed Elneny opening the scoring before in-form Nketiah struck twice in the space of six minutes.
Fabio Vieira provided two assists in a ruthless second-half display from Arsenal, but an injury sustained by Bukayo Saka will be a concern for Arteta ahead of their North London derby against Tottenham on Sunday.
League One side Oxford had not allowed the Gunners to settle in a frantic first half that was devoid of quality.
Arsenal wanted a penalty when Albert Sambi Lokonga's shot appeared to strike Elliott Moore's arm, before Nketiah poked over the crossbar from close range.
Matt Turner came out to deny striker Matty Taylor early in the second half after the Oxford striker got in behind a static Gunners defence.
Lewis Bate then blocked Saka's goal-bound strike after some neat footwork from the England winger in the penalty area as Arsenal showed more urgency.
Mikel Arteta introduced Granit Xhaka and Oleksandr Zinchenko just after the hour mark, and Elneny opened the scoring moments later, heading in Vieira's whipped free-kick from six yards out.
Nketiah raced onto an excellent pass from Vieira and rounded Edward McGinty to double the lead and finished clinically again after Gabriel Martinelli set him up to put Arsenal out of sight.
