Aging is associated with increased difficulty in facial emotion identification, possibly due to age-related network change. The neuropeptide oxytocin (OT) facilitates emotion identification but this is understudied in aging. To determine the effects of OT on dynamic facial emotion identification across adulthood, 46 young and 48 older participants self-administered intranasal OT or a placebo (P) in a randomized, double-blind procedure. Older participants were slower and less accurate in identifying emotions. Although there was no behavioral treatment effect, partial least squares (PLS) analysis supported treatment effects on brain patterns during emotion identification that varied by age and emotion. For young participants, OT altered the processing of sadness and happiness, while for older participants OT only affected the processing of sadness (15.3% covariance, p = 0.004). Further, seed PLS analysis showed that older participants in the OT group recruited a large-scale amygdalar network that was positively correlated for anger, fear, and happiness whereas older participants in the P group recruited a smaller, negatively correlated network (7% covariance, p = 0.002). Advancing the literature, these findings show that OT alters brain activity and amygdalar connectivity by age and emotion.