In this article for Scientific American online, Jennifer Bartz and Eric Hollander summarize the research on how oxytocin seems to improve empathy, leading with the widely noted "Oxytocin Improves Mind-Reading." (That's a great example of how serious research scientists can make their studies sexy.)
The article has many links to the relevant studies.
Bartz and Hollander are the Mt. Sinai scientists who have been testing oxytocin to reduce the symptoms of autism; Hollander has a patent application on this. And Hollander is working with Nastech to develop an autism drug based on carbetocin, a synthetic oxytocin.