Oxytocin is known as the 'love hormone' due its role in promoting mother-child 
and pair bonding. More recent research indicates that oxytocin may have broader 
pro-social effects on behavior and cognition, which points towards oxytocin's 
potential as an agent to help improve social cognition and functioning in 
psychiatric disorders such as schizophrenia and autism. However, new research on 
oxytocin has also uncovered a 'darker side', including oxytocin's possible role 
in social out-grouping and envy. Instead of a simple view of oxytocin as 'good' 
or 'bad', a more accurate depiction of oxytocin's role in social processing 
likely involves the presence of moderating factors. We review moderation effects 
in oxytocin and their implications for psychiatry. One implication is that, 
across diagnostic categories, oxytocin administration may have positive effects 
for patients with social cognitive deficits but negative effects for patients 
with social cognitive bias. We conclude that future intervention studies should 
use methods such as signal detection to measure both deficit and bias parameters 
of social cognition and to evaluate potential individual and contextual 
moderators both within and between psychiatric diagnoses in order to determine 
for whom oxytocin treatment may be beneficial and for whom it may actually be 
harmful.