Normal adult aging is associated with decline in some socioemotional abilities, such as the ability to recognize emotions in others, and age-related neurobiological processes may contribute to these deficits. There is increasing evidence that the neuropeptide oxytocin plays a key role in social cognition, including emotion recognition. The mechanisms through which oxytocin promotes emotion recognition are not well understood yet, and particularly in aging. In a randomized, double-blind, placebo-controlled within-subjects design, we investigated the extent to which a single dose of 40 IU of intranasal oxytocin facilitates emotion recognition in 40 younger (M = 24.90 yrs., SD = 2.97, 48% women) and 40 older (M = 69.70 yrs., SD = 2.99, 55% women) men and women. During two fMRI sessions, participants viewed dynamic positive and negative emotional displays. Preliminary analyses show that younger participants recognized positive and negative emotions more accurately than older participants (p < .001), with this behavioral effect not modulated by oxytocin. In the brain data, however, we found an age x treatment interaction in medial prefrontal cortex (xyz [14, 14, 6], p = .007) and superior temporal gyrus (xyz [53, 9, 2], p = .031). In particular, oxytocin (vs. placebo) reduced activity in these regions for older participants, while it enhanced activity in these regions for younger participants. In line with previous research, these findings support the notion that the effects of oxytocin vary by context and individual factors (e.g., social proficiency, age).