High-temperature superconductivity in pressurized La3Ni2O7 has attracted considerable interest, yet the superconducting phase is rather fragile. Although bulk superconductivity can be achieved by Pr substitution for La, the underlying mechanism is still unclear. A further puzzle is the role of oxygen content: moderate oxygenation enhances superconductivity, whereas high-pressure oxygen annealing suppresses it. Here combining multislice electron ptychography and electron energy-loss spectroscopy, we show that Pr doping mitigates oxygen vacancies and stabilizes a near-stoichiometric La2PrNi2O7 structure. Strikingly, high-pressure oxygen annealing introduces interstitial oxygen atoms that arrange into a stripe-ordered superstructure, which generates excess hole carriers and alters the electronic structure, ultimately suppressing superconductivity under pressure. This contrasts sharply with cuprates, where similar oxygen ordering is known to induce superconductivity. Our findings reveal a competition between interstitial oxygen ordering and superconductivity in bilayer nickelates, providing key insights into the pairing mechanism and guiding principles for engineering more robust superconducting phases.