Pep Guardiola has also handed Aro Muric his first senior start, with Ederson on the bench.
John Stones is a candidate to be deployed in a deep-lying midfield role, with Foden and David Silva ahead of him. Oleksandr Zinchenko, who has not featured so far this season, will fill in at left-back.
Danilo also makes his first appearance of the season after overcoming an ankle injury he picked up while with Brazil at the World Cup. Vincent Kompany and Nicolas Otamendi form a strong central defensive partnership.
Brahim Diaz, who is currently involved in a contract stand-off with City, starts in a strong front three with Gabriel Jesus and Riyad Mahrez.
Adrian Bernabe, a highly rated 17-year-old wideman who joined from Barcelona's youth set-up this season, is on the bench.
Oxford United: Mitchell, Long, Nelson, Dickie, Garbutt, Hanson, Baptiste, Whyte, Brannagan, Holdest, Obika.
Manchester City: Muric, Danilo, Kompany, Stones, Otamendi, Zinchenko, Silva, Diaz, Foden, Mahrez, Jesus.
Substitutes: Ederson, Walker, Sterling, Gündogan, Laporte, Sané, Bernabe.