The victim was approached by an unknown man in Kingsclere Road this morning.
A woman in her twenties was approached by an unknown man, who is believed to have been accompanied by two other men.
Following this police say the victim was raped.
It happened between 5am and 6am whilst she was walking along Kingsclere Road.
Thames Valley Police have been carrying out extra patrols in the area today and are appealing for witnesses.
The man who approached the victim is described as being aged in his twenties, around 5ft 10ins tall and of a muscular build, with shaved hair. There are currently no other descriptions available.
Investigating officer, Detective Sergeant Mark Personius, of Banbury CID, said: “We remain in the early stages of this investigation and are working to establish the circumstances, but I would like to appeal to anyone with information to come forward and speak to us.
“The victim is being supported by specially trained officers at this time, and police officers are currently at the scene conducting reassurance patrols in the area. Anyone with concerns can talk to an officer.
“If you have any information which can assist with this investigation please contact Thames Valley Police on 101, quoting reference number 43210073035. I would also like to appeal to anyone in the local area who has access to CCTV or dashcam footage to review it for anything significant.”