Empathy is related to a variety of prosocial behaviors, but the brain mechanisms producing the experience of empathy have not been fully characterized. This study investigated whether the experience of empathy raises oxytocin levels and affects subsequent generosity toward strangers. Short video clips of an emotional scene and an unemotional scene were used as stimuli. Participants rated the emotions they experienced and then played a $40 ultimatum game to gauge their generosity. We found that empathy was associated with a 47% increase in oxytocin from baseline. We also found the empathy–oxytocin response was stronger in women than in men. Higher levels of empathy were also associated with more generous monetary offers toward strangers in the ultimatum game. Our findings provide the first evidence that oxytocin is a physiologic signature for empathy and that empathy mediates generosity.