We investigate the structural, optical and electrical properties of single-layer graphene exposed to oxygen plasma treatment. We find that the pristine semimetallic behavior of graphene disappears upon plasma treatment, in favour of the opening of a bandgap and the featuring of semiconducting properties. The metal-to-semiconductor transition observed appears to be dependent on the plasma treatment time. The semiconducting behavior is also confirmed by photoluminescence measurements. The opening of a bandgap in graphene is explained in terms of graphene surface functionalization with oxygen atoms, bonded as epoxy groups. Ab initio calculations of the density of states show more details about the oxygen–graphene interaction and its effects on the graphene optoelectronic properties, predicting no states near the Fermi level at increasing epoxy group density. The structural changes are also monitored by Raman spectroscopy, showing the progressive evolution of the sp2 character of pristine graphene to sp3, due to the lattice decoration with out-of-plane epoxy groups.