It’s called the love hormone, but oxytocin isn’t that, exactly. It is heavily involved in the mental processes behind both maternal and romantic bonding, but it’s also involved in a broad and diverse spectrum of human mental and emotional activities, including labor and childbirth, sexual response, wound healing, social behavior, stress reduction, trust, and generosity. Some scientists even think the hormone can, paradoxically, have the opposite effect, promoting racist attitudes by drawing groups closer together and uniting them against perceived outsiders.
That aside, due to the importance of oxytocin in social functioning, there has been some investigation of the therapeutic use of the hormone in helping people with autism better adjust to the outside world. In a recent study, autistic children who received oxytocin showed improvement in emotional understanding and performed better on social tasks. Oxytocin also boosted what psychologists call "social attunement," meaning the capacity to recognize situations in which social interaction is necessary and to behave accordingly.
Synthetic oxytocin has several therapeutic uses already. As an injection, oxytocin is sometimes administered to women undergoing difficult labor, to help in that process or to help stimulate contractions and minimize bleeding. Nursing mothers are sometimes given oxytocin as an injection or nasal spray to improve lactation. In addition, people with anxiety can sometimes benefit from oxytocin nasal spray in difficult situations.
On the other hand, too much oxytocin is also a danger. In addition to strengthening the sometimes undesirable ingroup/outgroup dichotomy, the boost to social reasoning skills, especially in people who don’t have any sort of prior deficit in that area, can lead to an oversensitivity to the emotional states of other people. In particular, people with too much oxytocin—generally as a result of being administered a dose of synthetic hormone, rather than an excess being produced by the brain itself—overreact to emotional cues and may tend to over-interpret them, reading between the lines unnecessarily.