Oxytocin, an ancient substance from an evolutionary perspective, is produced in many locations and exerts a multitude of peripheral and central effects. It is produced in neurons of the supraoptic nucleus (SON) and paraventricular nucleus (PVN) within the hypothalamus. Oxytocin from magnocellular neurons of these nuclei is transported to the posterior pituitary and released into the circulation to exert hormonal effects. Oxytocin from the parvocellular neurons of the PVN release oxytocin within the brain to act as a neurotransmitter. Oxytocin is also produced in various peripheral organs, where it exerts local paracrine effects. Female reproduction includes oocyte maturation, ovulation, fertilization, labor, birth, and breastfeeding. These diverse physiological processes are all facilitated by oxytocin. Oxytocin released into the circulation from the SON and PVN induces contractions of the uterine myometrium during labor and contractions of the myoepithelial cells in the mammary glands to induce milk ejection during breastfeeding. Oxytocin released from the parvocellular neurons within the brain increases the propensity for social interaction; decreases fear, pain, stress, and inflammation; and enhances calm and well-being as well as processes related to growth and restoration (the calm and connection response). This pattern of oxytocin effects, with some modifications, is induced during all the different phases of female reproduction, i.e., pregnancy, labor, and breastfeeding. Skin-to-skin treatment between mother and newborn immediately after birth could be regarded as part of labor and is associated with a strong activation of oxytocin release in both mother and newborn, in particular of the parvocellular neurons that mediate the calm and connection response. The skin-to-skin contact relieves the stress of giving birth and of being born in mothers and newborns, respectively. The oxytocin release induced during skin-to-skin treatment is induced by activation of sensory cutaneous nerves originating in the chest region. The central oxytocinergic effect pattern can be promoted/induced in situations perceived by the mother as supportive and safe, such as being in the presence of a trusted individual in a familiar environment. Conversely, oxytocin release is not stimulated in situations, which the mother perceives as unsupportive and unsafe. The oxytocin release induced by labor, breastfeeding, and skin-to-skin contact may even be inhibited under these circumstances. Different types of stress can hinder reproduction, causing infertility and somatic as well as psychological complications during pregnancy and birth. High stress levels during pregnancy and labor may give rise to maternal mental health issues including maternal depression, anxiety, and posttraumatic stress disorder (PTSD). Additionally, stress can negatively impact fetal growth and development. Specific clinical practices have been linked to better outcomes for mothers and babies in both the short and long-term perspective, including a reduced incidence of maternal mental issues. These practices include continuity of care which allows the mother to meet the same midwife during pregnancy, giving birth in a familiar environment, and having a supportive individual present during labor. Postpartum skin-to-skin contact, as well as other forms of extra touch and massage, may further contribute to positive outcomes. Additionally, well-functioning social relationships and social networks have been shown to be beneficial. All these practices are associated with an enhanced release/function of oxytocin. In order to decrease the risk of stress reactions and of stress-related short - and long-term negative consequences for mother and baby, it is of importance to optimize oxytocin release during pregnancy, labor/birth, skin-to-skin contact, and breastfeeding. The use of the clinical practices that enhance oxytocin function which have been associated with a positive outcome and experience of labor and birth and which decrease the risk of maternal depression, anxiety, and PTSD should be recommended. Administration of synthetic oxytocin might be used in the future to prevent or treat short- and long-term negative consequences of stress during pregnancy and birth, but further studies are needed to prove this.