Study Objective: We investigated the short-term effectiveness of continuous positive airway pressure (CPAP) and oxygen in improving sleep quality in patients with obstructive sleep apnea (OSA). Design: Randomized, double-blind, placebo-controlled, parallel study. Setting: General Clinical Research Center at a university hospital. Patients: Seventy-six patients with untreated OSA. Interventions: Patients were randomly assigned to 1 of 3 treatments (CPAP, placebo-CPAP, or nocturnal oxygen at 3 L per minute) for 2 weeks. Sleep quality was assessed at baseline and after 1 and 14 days of therapy. Repeated-measures analysis of variance was used to evaluate treatment and time effects, and their interaction. Measurements and Results: Sixty-three patients completed the protocol. When compared with placebo-CPAP and nocturnal oxygen, CPAP increased rapid eye movement (REM) sleep and significantly reduced stage I sleep and the number of stage shifts (p <= .003). CPAP improved, to within normal limits, the apnea-hypopnea index, total arousal index, and mean oxyhemoglobin saturation (p <= .001). The effects of CPAP were apparent during the first night of therapy. Oxygen improved only mean nocturnal saturation (p = .009). CPAP had no significant effect on stage 2 sleep or slow-wave sleep. Conclusions: CPAP was associated with an improvement in sleep quality in patients with OSA by consolidating sleep, reducing stage I sleep, and improving REM sleep. CPAP was effective in correcting the respiratory and arousal abnormalities of OSA. The effectiveness of supplemental oxygen was limited to oxyhemoglobin desaturation.