The neuroendocrine state of new mothers may alter their neural processing of stressors in the environment through modulatory actions of oxytocin on the limbic system. We predicted that amygdala sensitivity to negatively arousing stimuli would be suppressed in postpartum compared to nulliparous women and that this suppression would be modulated by administration of oxytocin nasal spray. We measured brain activation (fMRI) and subjective arousal in response to negatively arousing pictures in 29 postpartum and 30 nulliparous women who received either oxytocin nasal spray or placebo before scanning. Pre- and post-exposure urinary cortisol levels were also measured. Postpartum women (placebo) demonstrated lower right amygdala activation in response to negative images, lower cortisol and lower negative photo arousal ratings to nulliparous women. Nulliparous women receiving oxytocin had lower right amygdala activation compared to placebo. Cortisol levels in the placebo group, and ratings of arousal across all women, were positively associated with right amygdala activation. Together, these findings demonstrate reductions in both amygdala activation and subjective negative arousal in untreated postpartum vs nulliparous women, supporting the hypothesis of an attenuated neural response to arousing stimuli in postpartum women. A causal role of oxytocin and the timing of potential effects require future investigation.