Percocet is a type of pain medication that works by combining two active ingredients: acetaminophen and oxycodone. Acetaminophen reduces the production of prostaglandins, which are chemicals responsible for causing inflammation and increasing sensitivity to pain. Oxycodone, on the other hand, binds to receptors in the brain and spinal cord to reduce pain sensations. Together these two drugs work synergistically to help relieve moderate to severe pain.