Background: Traumatic experiences may result in Posttraumatic Stress Disorder (PTSD), which is characterized as an exaggerated fear response that cannot be extinguished over time or in safe environments. What are beneficial psychotherapeutic treatment options for PTSD patients? Can oxytocin (OXT), which is involved in the stress response, and safety learning, ameliorate PTSD symptomatology and enhance psychotherapeutic effects? Here, we will review recent studies regarding OXT’s potential to enhance psychotherapeutic therapies for PTSD treatment. Method: We conducted a literature review on the neurobiological underpinnings of PTSD especially focusing on OXT’s involvement in the biology and memory formation of PTSD. Furthermore, we researched successful psychotherapeutic treatments for PTSD patients and discuss how OXT may facilitate observed psychotherapeutic effects. Results: For a relevant proportion of PTSD patients, existing psychotherapies are not beneficial. OXT may be a promising candidate to enhance psychotherapeutic effects, because it dampens responses to stressful events and allows for a faster recovery after stress. On a neural basis, OXT modulates processes that are involved in stress, arousal and memory. OXT effectively counteracts memory impairments caused by stress and facilitates social support seeking which is a key resilience factor for PTSD and which is beneficial in psychotherapeutic settings. Conclusion: OXT has many characteristics that are promising to positively influence psychotherapy for PTSD patients. It potentially reduces intrusions, but preserves memory of the event itself. Introducing OXT into psychotherapeutic settings may result in better treatment outcomes for PTSD patients. Future research should directly investigate OXT’s effects on PTSD, especially in psychotherapeutic settings.