A diagnosis method of an oxygen sensor for hybrid vehicles is disclosed, which includes receiving a diagnosis request signal for the diagnosis of an oxygen sensor from an EMS (Engine Management System) which is configured to control the engine; determining when a passive-run condition is occurring, under which the speed of a vehicle is within a previously set deceleration range as an accelerator is turned off in response to receiving the diagnosis request signal, and disengaging the engine clutch when the passive-run condition is occurring. Next fuel is cut to the engine in response to receiving a diagnosis request signal while the engine operating at a previously set reference speed by controlling the HSG once the engine clutch is disengaged. Once the above steps are complete a diagnosis of the oxygen sensor is then performed.