Methods and systems are provided for leveraging the pressure dependency of an oxygen sensor for estimating an engine ambient pressure. An intake or exhaust oxygen sensor is used for ambient pressure estimation by applying a reference voltage to the sensor while the engine is being pulled-down in a hybrid vehicle, and correcting an output of the sensor for dilution effects due to ambient humidity. The estimated ambient pressure is used to correct or confirm pressure estimated by other sources, such as other pressure sensors or a pressure model, as well as to tune the performance of the engine.