Oxytocin and vasopressin are regulators of anxiety, stress-coping, and sociality. They are released within hypothalamic and limbic areas from dendrites, axons, and perikarya independently of, or coordinated with, secretion from neurohypophysial terminals. Central oxytocin exerts anxiolytic and antidepressive effects, whereas vasopressin tends to show anxiogenic and depressive actions. Evidence from pharmacological and genetic association studies confirms their involvement in individual variation of emotional traits extending to psychopathology. Based on their opposing effects on emotional behaviors, we propose that a balanced activity of both brain neuropeptide systems is important for appropriate emotional behaviors. Shifting the balance between the neuropeptide systems towards oxytocin, by positive social stimuli and/or psychopharmacotherapy, may help to improve emotional behaviors and reinstate mental health.