There is growing interest in using intranasal oxytocin (OT) to treat social dysfunction in schizophrenia and bipolar disorders (i.e., psychotic disorders). While OT treatment results have been mixed, emerging evidence suggests that OT system dysfunction may also play a role in the etiology of metabolic syndrome (MetS), which appears in one-third of individuals with psychotic disorders and associated with increased mortality. Here we examine the evidence for a potential role of the OT system in the shared risk for MetS and psychotic disorders, and its prospects for ameliorating MetS. Using several studies to demonstrate the overlapping neurobiological profiles of metabolic risk factors and psychiatric symptoms, we show that OT system dysfunction may be one common mechanism underlying MetS and psychotic disorders. Given the critical need to better understand metabolic dysregulation in these disorders, future OT trials assessing behavioural and cognitive outcomes should additionally include metabolic risk factor parameters.