Autism spectrum conditions (autism) affect ~1% of the population and are characterized by deficits in social communication. Oxytocin has been widely reported to affect social-communicative function and its neural underpinnings. Here we report the first evidence that intranasal oxytocin administration improves a core problem that individuals with autism have in using eye contact appropriately in real-world social settings. A randomized double-blind, placebo-controlled, within-subjects design is used to examine how intranasal administration of 24 IU of oxytocin affects gaze behavior for 32 adult males with autism and 34 controls in a real-time interaction with a researcher. This interactive paradigm bypasses many of the limitations encountered with conventional static or computer-based stimuli. Eye movements are recorded using eye tracking, providing an objective measurement of looking patterns. The measure is shown to be sensitive to the reduced eye contact commonly reported in autism, with the autism group spending less time looking to the eye region of the face than controls. Oxytocin administration selectively enhanced gaze to the eyes in both the autism and control groups (transformed mean eye-fixation difference per second=0.082; 95% CI:0.025–0.14, P=0.006). Within the autism group, oxytocin has the most effect on fixation duration in individuals with impaired levels of eye contact at baseline (Cohen’s d=0.86). These findings demonstrate that the potential benefits of oxytocin in autism extend to a real-time interaction, providing evidence of a therapeutic effect in a key aspect of social communication.