Oxytocin is involved in pain transmission, although the detailed mechanism is not fully understood. Here, we generate a transgenic rat line that expresses human muscarinic acetylcholine receptors (hM3Dq) and mCherry in oxytocin neurons. We report that clozapine-N-oxide (CNO) treatment of our oxytocin-hM3Dq-mCherry rats exclusively activates oxytocin neurons within the supraoptic and paraventricular nuclei, leading to activation of neurons in the locus coeruleus (LC) and dorsal raphe nucleus (DR), and differential gene expression in GABA-ergic neurons in the L5 spinal dorsal horn. Hyperalgesia, which is robustly exacerbated in experimental pain models, is significantly attenuated after CNO injection. The analgesic effects of CNO are ablated by co-treatment with oxytocin receptor antagonist. Endogenous oxytocin also exerts anti-inflammatory effects via activation of the hypothalamus-pituitary-adrenal axis. Moreover, inhibition of mast cell degranulation is found to be involved in the response. Taken together, our results suggest that oxytocin may exert anti-nociceptive and anti-inflammatory effects via both neuronal and humoral pathways.