A member of the public made the discovery at around 5.35am yesterday (1/6).
The body of a woman, in her thirties, was found on the canal towpath in the town centre near the bridge which goes across the canal on Concorde Avenue, adjacent to the bus station and Debenhams store.
Investigating officer Detective Inspector Larry Johnson based at Banbury police station, said: “Currently officers are working to establish the circumstances which led to this woman’s death.
“We are therefore appealing for any witnesses in the area prior to 5.35am yesterday morning.
“We would especially like to know if anyone was seen on the bridge above the towpath.
“If anyone has any information, please call our non-emergency number 101.”