An apparatus for removing oil from air in an air compressor that has a piston reciprocable in a cylinder to compress the air, includes an oil removal chamber associated with the compressor. An unloader valve has an unactuated condition and an actuated condition disabling flow of compressed air out of the compressor and establishing fluid communication between the cylinder and the oil removal chamber. The apparatus may include an oil discharge port for draining oil from the oil removal chamber to a location away from the cylinder, and/or a filter element in the oil removal chamber.