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The neuropeptide oxytocin functions as a hormone and neurotransmitter and facilitates complex social cognition and approach behavior. Given that empathy is an essential ingredient for third-party decision-making in institutions of justice, we investigated whether exogenous oxytocin modulates empathy of an unaffected third-party toward offenders and victims of criminal offenses. Healthy male participants received intranasal oxytocin or placebo in a randomized, double-blind, placebo-controlled, between-subjects design. Participants were given a set of legal vignettes that described an event during which an offender engaged in criminal offenses against victims. As an unaffected third-party, participants were asked to rate those criminal offenses on the degree to which the offender deserved punishment and how much harm was inflicted on the victim. Exogenous oxytocin selectively increased third-party decision-makers’ perceptions of harm for victims but not the desire to punish offenders of criminal offenses. We argue that oxytocin promoted empathic concern for the victim, which in turn increased the tendency for prosocial approach behavior regarding the interpersonal relationship between an unaffected third-party and a fictional victim in the criminal scenarios. Future research should explore the context- and person-dependent nature of exogenous oxytocin in individuals with antisocial personality disorder and psychopathy, in whom deficits in empathy feature prominently.