The neuropeptide oxytocin plays a role in reward, stress, social affiliation, learning, and memory processes. As such, there is increasing interest in oxytocin as a potential treatment for addictions. The endogenous oxytocin system is itself altered by short- or long-term exposure to drugs of abuse. A large number of preclinical studies in rodents have investigated the effect of oxytocin administration on various drug-induced behaviors to determine whether oxytocin can reverse the neuroadaptations occurring with repeated drug and alcohol use. In addition, the mechanisms by which oxytocin acts to modify the behavioral response to drugs of abuse are beginning to be understood. More recently, a few small clinical studies have been conducted in cocaine, cannabis, and alcohol dependence. This review summarizes the preclinical as well as clinical literature to date on the oxytocin system and its relevance to drug and alcohol addiction.