The neuropeptide hormone oxytocin (OT) is involved in various physiological and pathological processes via the oxytocin receptor (OTR). While OT is most widely known as a reproductive system hormone and a nervous system neurotransmitter, the OT/OTR system has gradually gained much attention for its role in the gastrointestinal (GI) system, such as the GI motility, secretion, and bowel inflammatory reactions. Its importance in GI cancers has also been reported in the past few decades. The promising clinical observations have revealed OT’s anti-nociceptive effect, protective effect over gut injury, and the potential of using microbiota to naturally increase endogenous OT levels, which shed a light on the management of GI disorders with lower side effects. However, no current comprehensive review is available on the actions of OT/OTR in the GI tract. This review aims to present the lesser-known role of the OT/OTR system in the GI tract, and the most recent findings are discussed regarding the distribution and functional role of OTR signalling in regulating (patho)physiological functions of the GI tract. Special emphasis is placed on its therapeutic potential for clinical management of GI disorders, such as GI pain, inflammatory bowel disease (IBD), and irritable bowel syndrome (IBS). The recent characterisation of the OTR’s crystal structure has advanced research for designing and identifying new OTR-specific molecules. Future in-depth basic and clinical research is needed to further elucidate the involvement and detailed mechanism of OT/OTR in GI disorders, and the development of OTR-specific ligands.