PrBa2Cu3O7-y is the only homomorphic member of the entire rare-earth 1:2:3 family which is insulating and not metallic or superconducting. With this unusual behavior in mind, and with an eye to resolving certain questions regarding the widely held notion of otherwise mobile holes held captive in a supratrivalent Pr ionic state as its cause, we examined the effect of varying oxygen concentration on the structural, electrical, and magnetic properties of this compound. Powder x-ray diffraction studies revealed an orthorhombic-to- tetragonal order-disorder transition at oxygen levels close to those found for the superconducting lanthanide compounds. From Rietveld-refined powder-neutron-diffraction data taken on a fully oxygenated sample, key insights into the ambivalent character of Pr valency were obtained. Other aspects of Pr valency and carrier dynamics were uncovered by electrical and magnetic measurements as a function of y. We found that the room-temperature resistivity increases by about three orders of magnitude from y0 to y0.5, while the temperature dependence of the paramagnetic susceptibility remains quantitatively the same. We conclude from these results that removal of oxygen from PrBa2Cu3O7-y does not substantially alter the valence state of Pr, which we assert to be nominally 3+, but with strong overlap of its outer-lying 4f orbital with neighboring oxygen 2p levels results in a characteristically mixed or fluctuating valence situation reminiscent of heavy-fermion systems, and the principal effect on transport properties is on carrier concentration in the chains and steric hindrance of their motion by the resulting oxygen vacancies. © 1990 The American Physical Society.