B.C. is correct and also see my similar question ("Lamda Sond Light - how to turn off?") dated Dec 31. There were good answers there that helped me find the little box with my fingers without getting down on the floor and looking up. Once you find it, you can feel the pushbutton that resets - it's on the 'Back' of the box (ie: pointing toward the front of the car) and pushes in easily. Problem solved for another 30,000mi.

In my 81 owners' manual, it states that the light comes on every 30,000mi in accordance with EPA regulations and you should take the car to the Volvo dlr to have the O2 sensor checked and the light reset. On my 83 244, owned from new, the O2 sensor is still original after 145,000mi and a recent check by a Bosch service center gave it the OK, and the car passed CA smog test easily, so they last a long time if the engine is kept tuned.
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Bob (81-244GL B21F, 83-244DL B23F)