Who uses it
The Chicago Manual of Style, APA and MLA all require it. The AP Stylebook (used by most US newspapers) leaves it out unless it is needed to prevent confusion. In British English, Oxford University Press is the namesake, but many UK publishers omit it.
Why it matters
Without it, the last two items can be read as describing the item before them. With it, every item in the list is clearly separate. It very rarely creates ambiguity of its own ("my mother, a doctor, and a lawyer" could still be read as an aside), and when that happens the fix is to reorder the list.
The rule to follow
Pick one style and use it consistently in a piece of writing. If you are not bound by a house style, using the Oxford comma is the safer default because it never hides a separation you meant.
A case that cost money
In O'Connor v. Oakhurst Dairy (2017), a US appeals court sided with delivery drivers because a Maine overtime law listed exempt tasks without a serial comma, leaving "packing for shipment or distribution" ambiguous. The dairy settled for $5 million.
Frequently asked
Is the Oxford comma correct or incorrect?
Both are correct. It is a style choice: required by Chicago, APA and MLA, and omitted by AP except where it prevents confusion.
Do you use the Oxford comma with "or"?
Yes. The same rule applies: "tea, coffee, or juice".
Should I use it in a list of two items?
No. Two items take no comma: "salt and pepper".