The winger has gone to the Kassam Stadium for a month and will be there until March 21st.
Cain was loaned out earlier in the season to Luton Town but due to the weather only made one substitute appearance in a game at Chester City.
His move to Oxford was funded by supporters initiative 12th Man Fund and Oxford boss Chris Wilder who saw Cain hit a hat-trick against Oxford's reserves earlier in the season told his club's website: "Ashley comes highly recommended by Chris Coleman at Coventry.
"We played a behind closed doors game against them recently and he impressed us greatly. He can play out wide or through the middle and has bags of pace and gives us an extra option. I know he sees this as an opportunity to impress and I think he will do very well for us."
Picture copyright of Covsupport News Service. Credit CNS/SB