This longitudinal study investigated whether variation in the oxytocin receptor gene (OXTR) and early parent-child interactions predicted later empathic behavior in 84 toddlers at high or low familial risk for autism spectrum disorder. Two well-studied OXTR single-nucleotide polymorphisms, rs53576 and rs2254298, were examined. Parent-child interaction was measured at 15 and 18 months of age during free play sessions. Empathy was measured at 24 and 30 months using a response to parental distress paradigm. While there was no direct association between parent-child interaction quality or OXTR and empathy, rs53576 moderated the relation between interaction quality and empathy. Results suggest that the interplay between OXTR and early parent-child interactions predicts individual differences in empathy in children at varying risk for atypical social development. Findings are consonant with a differential susceptibility model in which an OXTR variant may increase the social salience of interaction processes for specific allele carriers. These results increase our understanding of predictors of empathy development in young children with a wide range of social outcomes.