Objective: Social Cognition and Emotional Intelligence have been shown to be deficient in patients with schizophrenia and these are not remediated by antipsychotic medications or psychosocial interventions. Social cognition is associated with functional outcome, an important step in striving for recovery in this population. The hormone and neurotransmitter, oxytocin, which has been associated with social bonding and trust has been shown to improve measures of some aspects of social cognition in humans. The study will assess the effect of acute administration of intranasal oxytocin on measures of social cognition and functioning as well as on emotional intelligence and symptoms. Study population: The study population will include patients with a DSM-IV diagnosis of schizophrenia or schizoaffective disorder who have been on a stable medication regimen for 6 weeks. We will enroll a total of 30 subjects (N=15 placebo and N=15 oxytocin groups). Experimental design and methods: After a one week lead in phase, participants will undergo 3 weeks of oxytocin (20 IU BID) or placebo administration (double blind) in addition to their existing medication regimen. Outcome measures will be administered during the lead in phase, and at the end of the study drug administration phase (under the acute effect of OT). The primary outcome measure will be the Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT) and the Maryland Assessment of Social Competence (MASC). Secondary measures include rating from the domains of social cognition (emotion perception, attributional style, theory of mind and social perception), symptom rating and measures of social anxiety and quality of life. Side effects and symptoms will be measured weekly.