Catalyzes the selective oxidation of C1 hydroxyl moieties on mono-, oligo- and polysaccharides with concomitant reduction of molecular oxygen to hydrogen peroxide. This results in the formation of the corresponding lactones, which typically undergo spontaneous hydrolysis. Xylooligosaccharide oxidase is able to oxidize a variety of substrates including D-xylose, D-cellobiose, lactose and arabinose. The enzyme acts primarily on xylooligosaccharides, indicating that it prefers pentose-based oligosaccharides over hexose-based oligosaccharides. D-xylobiose + O2 = D-xylobiono-1,5-lactone + H2O2 D-xylotriose + O2 = D-xylotriono-1,5-lactone + H2O2 D-xylotetraose + O2 = D-xylotetraono-1,5-lactone + H2O2 Binds 1 FAD per subunit in a bicovalent manner. Optimum pH is 7. Optimum temperature is 30 degrees Celsius. Stable up to 60 degrees Celsius. The FAD cofactor is bound via a bicovalent 6-S-cysteinyl, 8alpha-N1-histidyl FAD linkage. Belongs to the oxygen-dependent FAD-linked oxidoreductase family.