Despite the dominant role of the hormone oxytocin (OT) in social behavior, little is known about the role of OT in the perception of social relationships. Furthermore, it is unclear whether there are sex differences in the way that OT affects social perception. Here, we employed a double-blind, placebo-controlled crossover design to investigate the effect of OT on accurate social perception. Following treatment, 62 participants completed the Interpersonal Perception Task, a method of assessing the accuracy of social judgments that requires identification of the relationship between people interacting in real life video clips divided into three categories: kinship, intimacy and competition. The findings suggest that OT had a general effect on improving accurate perception of social interactions. Furthermore, we show that OT also involves sex-specific characteristics. An interaction between treatment, task category and sex indicated that OT had a selective effect on improving kinship recognition in women, but not in men, whereas men's performance was improved following OT only for competition recognition. It is concluded that the gender-specific findings reported here may point to some biosocial differences in the effect of OT which may be expressed in women's tendency for communal and familial social behavior as opposed to men's tendency for competitive social behavior.