We report the petrology and oxygen isotopic composition, using a Cameca NanoSIMS 50L ion microprobe, of a plagioclase–olivine inclusion, C#1, found in the Ningqiang carbonaceous chondrite. In addition to major phases (plagioclase, spinel and olivine), C#1 is also surrounded by a pyroxene rim (64 vol % Ca-rich and 36 vol % Ca-poor pyroxenes). On a three-isotope oxygen diagram, δ17O vs. δ18O, the compositions of individual minerals analyzed in C#1 fall along the carbonaceous chondrite anhydrous mineral line (CCAM), and oxygen isotopic compositions in C#1 show significant variability in δ18O and δ17O. The oxygen isotopic compositions of the pyroxene rim minerals are similar to those of the other host minerals, which suggests that the rim likely formed from the same melting process as the host. The rim is considered to have formed as a result of interaction between an 16O-poor gas and a melt. Some spinel grains are typically 16O-rich and likely of relict origin, which is similar to 16O-rich Ca-, Al-rich inclusions, which are probably a precursor of C#1. The inclusion then likely melted in an 16O-poor region where chondrules form, accompanied by oxygen isotope exchange with an 16O-poor gas. Some anorthite, pyroxene and spinel might have undergone fluid-assisted thermal metamorphism on the Ningqiang chondrite parent body. The oxygen isotope data and evolution of the C#1 plagioclase–olivine inclusion are similar with those of Al-chondrules in chondrites.