There is growing interest in the use of oxytocin (OT) as a potential treatment for alcohol and other substance-use disorders. OT is a neuropeptide that modulates adaptive processes associated with addiction including reward, tolerance, associative learning, memory, and stress responses. OT exerts its effects through interactions with the hypothalamic-pituitary-adrenal axis and multiple neurotransmitter systems including the dopamine mesolimbic reward and corticotrophin-releasing factor stress systems. The effects of OT on stress systems are of high interest, given the strong link between stress, drug use and relapse, and known dysregulation of hypothalamic-pituitary-adrenal-axis activity associated with substance-use disorders. At the same time, the OT system is itself altered by acute or chronic drug exposure. This review summarizes the preclinical and clinical literature on the OT system and its relevance to drug and alcohol addiction. In addition, findings from recent clinical trials conducted in participants with cocaine, cannabis, or alcohol use disorder are included and evidence that OT may help to normalize blunted stress responses, and attenuate withdrawal-associated hypercortisolism, negative mood, and withdrawal symptoms is summarized.