The effect of O2 chemisorption on the electronic structure and magnetism of fcc Co overlayers, grown epitaxially on Cu(100), has been studied by use of spin- and angle-resolved photoelectron spectroscopy. At room temperature, for exposures between 2 and 7 L Of O2, oxygen adsorbs dissociatively in an ordered c (2 X 2) structure. [ 1 langmuir (L) = 10(-6) Torr sec.] The chemical interaction between the adsorbate and the substrate manifests itself through a reduction of the 3d surface-state emission at GAMMA near E(F). The oxygen bands exhibit an induced exchange splitting of 0.2 +/- 0.1 eV at the center of the surface Brillouin zone. With higher O2 exposure, corresponding to the formation of a CoO surface phase, the photoemission spectra show evidence for strong correlation effects in the electronic structure. A satellite appears about 10 eV below E(F) in the spectra. The formation of the CoO surface-oxide phase is accompanied by a decrease in the photoelectron spin polarization revealing the quenching of the surface ferromagnetic order. At low temperatures (150 K) and high exposures Of O2 the formation of a Co3O4 phase was observed, which again has a different electronic structure.