The neuropeptide oxytocin (OT) has emerged as a potent modulator of diverse aspects of interpersonal relationships. OT appears to work in close interaction with several other neurotransmitter networks, including the dopaminergic reward circuit, and to be dependent on sex-specific hormonal influences. In this chapter, we focus on four main domains of OT and interpersonal relationships, including (1) the protective effect of OT on an individual's ability to withstand stress (i.e., stress buffering), (2) the effect of OT on emotion recognition and empathy, (3) OT's ability to enhance social synchrony and cooperation among individuals, and (4) the effect of OT on an individual's perception of social touch. We then illustrate the connection between OT and loneliness while grieving the loss of a loved one. We finish by discussing the clinical potential of OT, focusing on its potential role as an adjunct to psychotherapy, its enhancement through sex-specific hormonal influences, and the difficulties that present themselves when considering OT as a therapy. Overall, we argue that OT continues to hold strong therapeutic promise, but that it is strongly dependent on internal and external influences, for instance the patient's personal past experiences and interaction with the therapist, in order to provide the best possible therapy.