The role of ambient oxygen gas (O2) on molecular and nanoparticle formation and agglomeration was studied in laser ablation plumes. As a lab-scale surrogate to a high explosion detonation event, nanosecond laser ablation of an aluminum alloy (AA6061) target was performed in atmospheric pressure conditions. Optical emission spectroscopy and two mass spectrometry techniques were used to monitor the early to late stages of plasma generation to track the evolution of atoms, molecules, clusters, nanoparticles, and agglomerates. The experiments were performed under atmospheric pressure air, atmospheric pressure nitrogen, and 20% and 5% O2 (balance N2), the latter specifically with in situ mass spectrometry. Electron microscopy was performed ex situ to identify crystal structure and elemental distributions in individual nanoparticles. We find that the presence of ≈20% O2 leads to strong AlO emission, whereas in a flowing N2 environment (with trace O2), AlN and strong, unreacted Al emissions are present. In situ mass spectrometry reveals that as O2 availability increases, Al oxide cluster size increases. Nanoparticle agglomerates formed in air are found to be larger than those formed under N2 gas. High-resolution transmission electron microscopy demonstrates that Al2O3 and AlN nanoparticle agglomerates are formed in both environments; indicating that the presence of trace O2 can lead to Al2O3 nanoparticle formation. The present results highlight that the availability of O2 in the ambient gas significantly impacts spectral signatures, cluster size, and nanoparticle agglomeration behavior. These results are relevant to understanding debris formation in an explosion event, and interpreting data from forensic investigations.