The neuropeptide oxytocin facilitates parental caregiving and is involved in the processing of infant vocal cues. In this randomized-controlled trial with functional magnetic resonance imaging we examined the influence of intranasally administered oxytocin on neural activity during emotion recognition in infant faces. Blood oxygenation level dependent (BOLD) responses during emotion recognition were measured in 50 women who were administered 16 IU of oxytocin or a placebo. Participants performed an adapted version of the Infant Facial Expressions of Emotions from Looking at Pictures (IFEEL pictures), a task that has been developed to assess the perception and interpretation of infants' facial expressions. Experimentally induced oxytocin levels increased activation in the inferior frontal gyrus (IFG), the middle temporal gyrus (MTG) and the superior temporal gyrus (STG). However, oxytocin decreased performance on the IFEEL picture task. Our findings suggest that oxytocin enhances processing of facial cues of the emotional state of infants on a neural level, but at the same time it may decrease the correct interpretation of infants' facial expressions on a behavior level.This article is part of a Special Issue entitled Oxytocin and Social Behav.