The neurohypophysial peptide oxytocin (OT) and OT-like hormones facilitate reproduction in all vertebrates at several levels. The major site of OT gene expression is the magnocellular neurons of the hypothalamic paraventricular and supraoptic nuclei. In response to a variety of stimuli such as suckling, parturition, or certain kinds of stress, the processed OT peptide is released from the posterior pituitary into the systemic circulation. Such stimuli also lead to an intranuclear release of OT. Moreover, oxytocinergic neurons display widespread projections throughout the central nervous system. However, OT is also synthesized in peripheral tissues, e.g., uterus, placenta, amnion, corpus luteum, testis, and heart. The OT receptor is a typical class I G protein-coupled receptor that is primarily coupled via G q proteins to phospholipase C-β. The high-affinity receptor state requires both Mg 2+ and cholesterol, which probably function as allosteric modulators. The agonist-binding region of the receptor has been characterized by mutagenesis and molecular modeling and is different from the antagonist binding site. The function and physiological regulation of the OT system is strongly steroid dependent. However, this is, unexpectedly, only partially reflected by the promoter sequences in the OT receptor gene. The classical actions of OT are stimulation of uterine smooth muscle contraction during labor and milk ejection during lactation. While the essential role of OT for the milk let-down reflex has been confirmed in OT-deficient mice, OT's role in parturition is obviously more complex. Before the onset of labor, uterine sensitivity to OT markedly increases concomitant with a strong upregulation of OT receptors in the myometrium and, to a lesser extent, in the decidua where OT stimulates the release of PGF 2α. Experiments with transgenic mice suggest that OT acts as a luteotrophic hormone opposing the luteolytic action of PGF 2α. Thus, to initiate labor, it might be essential to generate sufficient PGF 2α to overcome the luteotrophic action of OT in late gestation. OT also plays an important role in many other reproduction-related functions, such as control of the estrous cycle length, follicle luteinization in the ovary, and ovarian steroidogenesis. In the male, OT is a potent stimulator of spontaneous erections in rats and is involved in ejaculation. OT receptors have also been identified in other tissues, including the kidney, heart, thymus, pancreas, and adipocytes. For example, in the rat, OT is a cardiovascular hormone acting in concert with atrial natriuretic peptide to induce natriuresis and kaliuresis. The central actions of OT range from the modulation of the neuroendocrine reflexes to the establishment of complex social and bonding behaviors related to the reproduction and care of the offspring. OT exerts potent antistress effects that may facilitate pair bonds. Overall, the regulation by gonadal and adrenal steroids is one of the most remarkable features of the OT system and is, unfortunately, the least understood. One has to conclude that the physiological regulation of the OT system will remain puzzling as long as the molecular mechanisms of genomic and nongenomic actions of steroids have not been clarified.