Child conduct problems (CPs) are a robust predictor of adult mental health; the concurrence of callous-unemotional (CU) traits confers specific risk for psychopathy. Psychopathy may be related to disturbances in the oxytocin (OXT) system. Evidence suggests that epigenetic changes in the OXT receptor gene (OXTR) are associated with lower circulating OXT and social-cognitive difficulties. We tested methylation levels of OXTR in 4- to 16-year-old males who met DSM criteria for a diagnosis of oppositional-defiant or conduct disorder and were stratified by CU traits and age. Measures were DNA methylation levels of six CpG sites in the promoter region of the OXTR gene (where a CpG site is a cytosine nucleotide occurs next to a guanine nucleotide in the linear sequence of bases along its lenth, linked together by phosphate binding), and OXT blood levels. High CU traits were associated with greater methylation of the OXTR gene for two cytosine nucleotide and guanine nucleotide phosphate linked sites and lower circulating OXT in older males. Higher methylation correlated with lower OXT levels. We conclude that greater methylation of OXTR characterizes adolescent males with high levels of CU and CPs, and this methylation is associated with lower circulating OXT and functional impairment in interpersonal empathy. The results add genetic evidence that high CU traits specify a distinct subgroup within CP children, and they suggest models of psychopathy may be informed by further identification of these epigenetic processes and their functional significance.