Without the small island of Oshima there would be no Matsushima. Located a short walk from today's Matsushimakaigan Station, Oshima became famous a millennium ago as a place of special spiritual power. One of the most famous pilgrims to come to Oshima was Kenbutsu Shonin. He spent more than a decade on the island reciting sutras. Legends arose about him having magical powers, such as the ability to fly. In 1119, Emperor Toba heard of his feats and sent one thousand young pine trees as a gift. Legend has it this was the origin of "Matsushima" (lit. "Pine Islands").

Today's Oshima Island retains a number of interesting landmarks and features from its long history. The island is ringed by caves containing Buddhist stone memorial tablets and Buddha figures carved into the rock. At the northern end of Oshima is a clearing with a wooden post dedicated to Kenbutsu Shonin, though he likely lived in the clearing next to the caves and tunnel. Just to the south are tall stones inscribed with poetry dedicated to the famous haiku poet Matsuo Basho, who began his journey in Matsushima by setting foot on Oshima. Just as Kenbutsu Shonin inspired generations of religious devotees to visit, Basho's Narrow Road to the Deep North has drawn fans of poetry to Matsushima ever since it was first published more than three hundred years ago. On the southern tip of the island is a lookout point and an unusual hollow stone pagoda with a hole in it. The hole was thought to lead to the underworld, leading people to deposit ashes of the deceased there to pray for a peaceful afterlife.