The dynamics of oxytocin and its site of action in the brain are poorly understood due to the lack of appropriate tools, despite the interest in the central action of oxytocin signaling. Here, we develop and apply an oxytocin analogue probe by conjugating it with an alkyne via a widely applicable simple coupling reaction. Alkyne-tagged oxytocin behaves similarly to endogenous oxytocin while allowing specific and highly sensitive detection of extracellularly applied oxytocin. Using this probe, we find the existence of high-affinity specific binding sites of oxytocin in the hippocampus. Furthermore, characterization of oxytocin dynamics reveals the cellular basis of its volume transmission in the brain tissue. Finally, we show the wide applicability of this technique for other centrally acting peptides. Thus, the alkyne tagging strategy provides a unique opportunity to characterize the spatiotemporal dynamics of oxytocin and other small-sized peptides in the brain tissue.