Posttraumatic stress disorder (PTSD) is a chronic, debilitating condition for which effective medications are scant and little is known about neural correlates of risk versus resilience. Oxytocin is a hypothalamic neuropeptide that has demonstrated promise in modulating neurobiological and behavioral correlates of PTSD. Cognitive deficits in areas such as working memory and executive control are highly prevalent among individuals with PTSD and oxytocin might modulate these impairments in individuals with PTSD. Using a double-blind, placebo-controlled design, this study employed functional MRI (fMRI) and the n-back working memory task to examine the effects of oxytocin (24 IU) versus placebo on working memory and dorsolateral prefrontal cortex (DLPFC) connectivity among individuals with PTSD (n = 16) as compared with a trauma-exposed control group (n = 18). Results indicate that individuals with PTSD on oxytocin performed better in the 2-back condition of the n-back task compared with individuals with PTSD on placebo. Results also indicate that connectivity between DLPFC and anterior cingulate increased in the 2-back condition among individuals with PTSD on oxytocin as compared with placebo. These findings provide preliminary evidence of an effect of oxytocin on working memory among individuals with PTSD and insights into the neurobiological mechanisms underlying this association. Future studies are necessary to understand the mechanisms responsible for working memory deficits in PTSD and to examine the potential of oxytocin for use as a treatment for PTSD.