Oxytocin is a versatile neuropeptide that modulates many different forms of social behavior. Recent hypotheses pose that oxytocin enhances the salience of rewarding and aversive social experiences, and the field has been working to identify mechanisms that allow oxytocin to have diverse effects on behavior. Here we review studies conducted on the California mouse (Peromyscus californicus) that shed light on how oxytocin modulates social behavior following stressful experiences. In this species, both males and females exhibit high levels of aggression, which has facilitated the study of how social stress impacts both sexes. We review findings of short- and long-term effects of social stress on the reactivity of oxytocin neurons. We also consider the results of pharmacological studies which show that oxytocin receptors in the bed nucleus of the stria terminalis and nucleus accumbens have distinct but overlapping effects on social approach behaviors. These findings help explain how social stress can have different behavioral effects in males and females, and how oxytocin can have such divergent effects on behavior. Finally, we consider how new technological developments and innovative research programs take advantage of the unique social organization of California mice to address questions that can be difficult to study in conventional rodent model species. These new methods and questions have opened new avenues for studying the neurobiology of social behavior.