Aim The mechanisms underlying the inhibitory effects of oxytocin (OT) on colon tone are not totally understood. We explore the mechanisms of OT on spontaneous contractility in rat distal colon and identify the mediators involved in this action. Methods In rat distal colon strips, mechanical activity was analysed and the production of nitric oxide (NO) in tissue loaded with the fluorochrome DAF‐FM was visualized by confocal microscopy. OT receptor (OTR) expression was determined by Western blotting and immunofluorescence. Results In rat distal colon, OT produced a concentration‐dependent reduction in the spontaneous contraction, which was abolished by the OTR antagonist atosiban, the neural blocker tetrodotoxin and the inhibitor of neuronal nitric oxide synthase (nNOS) NPLA. The inhibitory effects of OT were not affected by propranolol, atropine, the nicotinic cholinoceptor blocker hexamethonium, the vasoactive intestinal peptide receptor antagonist VIPHyb, the P2 purinoceptor antagonist PPADS, the adenosine A1 receptors antagonist DPCPX and the prostacyclin receptor antagonist Ro1138452. The soluble guanylyl cyclase (sGC) inhibitor ODQ and the small conductance Ca2+‐activated K+ (CaK+) channels blocker apamin significantly reduced the relaxation induced by OT, nicotine, sodium nitroprusside and the sGC activator BAY 41‐2272. The neural release of NO elicited by OT was prevented by NPLA, tetrodotoxin and atosiban. The presence of the OTR and its co‐localization with nNOS was detected by immunohistochemistry and Western blotting experiments. Conclusion These results demonstrate the NO release from enteric neurones induced by activation of OTR mediates distal colon relaxation. sGC and small conductance CaK+ channels are involved in this relaxation.