Air dryer for a compressed air system includes a desiccant canister and a tubular oil filter received within a cavity within the canister circumscribed by a desiccant bed. A tubular oil filter is mounted on a removable module so that the module and the oil filter may be removed from the air dryer without disturbing the desiccant canister. Accordingly, the oil filter is replaced at more frequent intervals than is the desiccant. During purging, purge air is bypassed around the oil filter directly to the exhaust port through a check valve permitting communication through a bypass passage only during purging.