Air-fuel ratio control system for an engine having a catalyst purifying exhaust gases, first oxygen sensor disposed upstream of the catalyst, and second oxygen sensor disposed downstream. Intake air flow rate is detected. An amount of oxygen flowing into the catalyst is calculated using oxygen concentration detected by the first sensor and the detected intake air flow rate. The air-fuel ratio is alternately controlled to lean and rich by comparison between the calculated oxygen amount and target values. A rich oxygen amount and a lean oxygen amount are calculated. A correction amount for correcting the first sensor output is calculated based on the rich oxygen amount, the lean oxygen amount, and an accumulated value of the detected intake air flow rate. The oxygen concentration corrected with the correction amount is used for calculating the inflowing oxygen amount, the rich operation oxygen amount, and the lean operation oxygen amount.