OSIRIS is a near-infrared (1.0-2.4 μm) integral field spectrograph operating behind the adaptive optics system at Keck Observatory and one of the first lenslet-based integral field spectrographs. Since its commissioning in 2005, it has been a productive instrument, producing nearly half the laser guide star adaptive optics papers on Keck. The complexity of its raw data format necessitated a custom data reduction pipeline (DRP) delivered with the instrument in order to iteratively assign flux in overlapping spectra to the proper spatial and spectral locations in a data cube. Other than bug fixes and updates required for hardware upgrades, the bulk of the DRP has not been updated since initial instrument commissioning. We report on the first major comprehensive characterization of the DRP using on-sky and calibration data. We also detail improvements to the DRP, including characterization of the flux assignment algorithm, exploration of spatial rippling in the reduced data cubes, and improvements to several calibration files, including the rectification matrix, bad-pixel mask, and wavelength solution. We present lessons learned from over a decade of OSIRIS data reduction that are relevant to the next generation of integral field spectrograph hardware and data reduction software design.