An explanation is given for the strong dependence of electrical conductivity of semi‐insulating polycrystalline silicon films on oxygen content. The proposed model assumes a shell structure such that each Si grain is surrounded by a layer of SiO2, the thickness of which is related to the oxygen content of the film. The conduction proceeds by tunneling of thermally generated carriers through the oxide layers separating adjacent grains. The model properly predicts the dependence of the low‐field conductivity on both oxygen concentration and temperature without any adjustable parameters. Evidence for oxide barrier lowering for barrier thicknesses <5 A˚ is observed.