The shop in Westbourne Grove, west London, will stock designs made from second-hand clothing and fabric by a team of young designers.
The charity is due to open a further two new boutiques in Chelsea and Chiswick later this summer.
To mark Saturday's opening seven one-off recycled pieces will be sold in an online auction in aid of Oxfam.
Seven UK designers used fabric from old evening gowns to duvet covers to make the clothes which went on sale on eBay on Thursday.
The new shops will sell items created out of donated goods, Fairtrade clothing and accessories made by volunteers as well as the more traditional second-hand clothing.
The rebranding has been overseen by former Topshop director and long-term Oxfam supporter Jane Shepherdson.
She said: "These boutiques are all about creating a great shopping experience.
"Oxfam has always been a place where stylish people hunt for interesting items to create their look, the boutiques are set to make that even easier."
Oxfam's chief executive Barbara Stocking said they were responding to customer demands for a more "contemporary shopping experience".
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