Trains have started running on a second line between London and Oxford city centre following a £320m project.
Chiltern Railways said its new service to London Marylebone would offer "genuine competition".
Great Western Railway already runs a service between Oxford and London Paddington.
The new service started running from the new station Oxford Parkway, when it opened a year ago, but was extended to the city centre from Monday.
Network Rail contributed £190m towards the project, with Chiltern Railways investing £130m.
More than 850,000 journeys are expected to be taken to or from Oxford on the new services in the next year.
Franchise competition is rare on Britain's railways: among the few examples are London to Birmingham, London to Gatwick Airport, and London to Peterborough.
The first official service left Oxford train station for London Marylebone at 0720 GMT on Monday, after a test service used the route on Sunday.
NETWORK RAIL
Transport Secretary Chris Grayling said: "This is the first new rail link between a major British city and the capital in 100 years and also a shining example of partnership working".
About 1.5 million passengers used the service from Oxford Parkway, on the outskirts of the city , to London Marylebone in its first year.
In September, the final pieces of track were installed for the extension into the city centre, which involved upgrading a branch line.
Network Rail chief executive, Mark Carne, said privately funded railway projects based on customers' needs were "exactly what Network Rail is all about" and called for "many more railway upgrades following this model in future".
