Over the past century, the polypeptide oxytocin has played an important role in medicine with major highlights including the identification of its involvement in parturition and the milk let-down reflex. Oxytocin is now implicated in an extensive range of psychological phenomena including reward and memory processes and has been investigated as a treatment for several psychiatric disorders including addiction, anxiety, autism, and schizophrenia. In this review, we first provide an historical overview of oxytocin and describe key aspects of its physiological activity. We then outline some pharmacological limitations in this field of research before highlighting the role of oxytocin in a wide range of behavioral and neuronal processes. Finally, we review evidence for a modulatory role of oxytocin with regard to psychostimulant effects. Key findings suggest that oxytocin attenuates a broad number of cocaine and methamphetamine induced behaviors and associated neuronal activity in rodents. Evidence also outlines a role for oxytocin in the prosocial effects of 3,4-methylenedioxymethamphetamine (MDMA, Ecstasy) in both rodents and humans. Clinical trials should now investigate the effectiveness of oxytocin as a novel intervention for psychostimulant addiction and should aim to determine its specific role in the therapeutic properties of MDMA that are currently being investigated.