The variational R-matrix approach for photoionization has been modified in two ways to treat Rydberg excited states of large radius: (1) the large residual contributions to dipole transition and normalization integrals outside the R-matrix radius are treated analytically, and (2) the amplitude of Rydberg functions on the boundary is considered explicitly. Photoionization cross sections as a function of energy are reported for 2p4 O(3P) ground-state atomic oxygen and for O+(4S)3p P3 excited-state oxygen and compared with previous work, where available. The excited-state cross section is in excellent agreement with limited experimental data. A Cooper minimum is predicted in the excited-state partial cross section to the O+(4S)μd continuum. A systematic study of the effect of electronic correlation in the configuration-interaction (CI) expansion of the wave function inside the R matrix is reported. The location of the Cooper minimum is the feature that is most sensitive to the CI representation used. © 1989 The American Physical Society.