The 20-year-old drops down a division hoping for a shot at Championship redemption, having endured a difficult loan spell with Ipswich Town in the first half of the 2023-24 campaign.
Scarlett failed to register a single goal or assist in 12 matches for Kieran McKenna's side, whom he did not start once for either, although he made four Premier League appearances for Tottenham towards the end of the season.
Scarlett is behind Richarlison and new signing Dominic Solanke in the strikers' pecking order, though, and even though the former could leave before the window slams shut, Scarlett would have still been starved of opportunities up front.
Instead, the 2004-born protege will spend the next year with Oxford, who won promotion back to the Championship for the first time since the 1998-99 season last term and stunned Norwich City 2-0 i their opening game of the season.
"Dane is such an exciting young centre-forward and it's fantastic to bring him into the Club," Oxford boss Des Buckingham told the club's official website. "I always speak about making sure we sign the right profile of player, both in terms of quality on the pitch and attitude off it, and in Dane, we have found that.
Scarlett "over the moon" to join Oxford
"Dane has been involved with Tottenham throughout their pre-season training and we expect that he can come straight into the group and begin making a difference straight away. Not only does he bring an eye for goal, but his pace and intelligence will be important to us both in the way we attack and in the way we press out of possession."
Meanwhile, Scarlett said that he was "over the moon" to join the Championship new boys, whom he earmarked as the best option to further his career, adding: "I'm over the moon to be here and I'm ready to get started.
"The team done really well last season, and I see an opportunity here for myself. Oxford for me was the best option to come and prove myself and show what I can do. I'm a team player that will look to bring goals and hopefully we can deliver this season."
Scarlett came through the Tottenham youth system and broke into the first team under Jose Mourinho, who handed him his debut in a Europa League clash with Ludogorets in November 2020, where be became Spurs' youngest-ever player.
The striker only held that record for a matter of weeks, though - it was broken by Alfie Devine in an FA Cup win over Marine in January 2021 - and he signed a new long-term contract until 2027 last year.
Before a disappointing stint at Ipswich, Scarlett spent the 2022-23 campaign with Portsmouth in League One, scoring six goals and setting up two more in 40 matches for the 2008 FA Cup winners.
The 20-year-old becomes the fourth player to leave Tottenham on loan this summer after Alejo Veliz (Espanyol), Bryan Gil (Girona) and Pierre-Emile Hojbjerg (Marseille), but the latter's move is expected to be made permanent next summer.