Schizophrenia is characterized by symptoms of psychosis and sociocognitive deficits. Considering oxytocin’s antipsychotic and prosocial properties, numerous clinical, and preclinical studies have explored the neuropeptide’s therapeutic efficacy. Sex differences in the clinical course of schizophrenia, as well as in oxytocin-mediated behaviors, indicate the involvement of gonadal steroid hormones. The current narrative review aimed to explore empirical evidence on the interplay between schizophrenia psychopathology and oxytocin’s therapeutic potential in consideration of female gonadal steroid interactions, with a focus on estrogens. The review was conducted using the PubMed and PsychINFO databases and conforms to the Scale for the Assessment of Narrative Review Articles (SANRA) guidelines. The results suggest a potential synergistic effect of the combined antipsychotic effect of oxytocin and neuroprotective effect of estrogen on schizophrenia. Consideration of typical menstrual cycle-related hormonal changes is warranted and further research is needed to confirm this assumption.