Mitochondrial dynamics—fission and fusion—are associated with ischaemic heart disease (IHD). This study explored the protective effect of vagal nerve stimulation (VNS) against isoproterenol (ISO)‐induced myocardial ischaemia in a rat model and tested whether VNS plays a role in preventing disorders of mitochondrial dynamics and function. Isoproterenol not only caused cardiac injury but also increased the expression of mitochondrial fission proteins [dynamin‐related peptide1 (Drp1) and mitochondrial fission protein1 (Fis‐1)) and decreased the expression of fusion proteins (optic atrophy‐1 (OPA1) and mitofusins1/2 (Mfn1/2)], thereby disrupting mitochondrial dynamics and leading to increase in mitochondrial fragments. Interestingly, VNS restored mitochondrial dynamics through regulation of Drp1, Fis‐1, OPA1 and Mfn1/2; enhanced ATP content and mitochondrial membrane potential; reduced mitochondrial permeability transition pore (MPTP) opening; and improved mitochondrial ultrastructure and size. Furthermore, VNS reduced the size of the myocardial infarction and ameliorated cardiomyocyte apoptosis and cardiac dysfunction induced by ISO. Moreover, VNS activated AMP‐activated protein kinase (AMPK), which was accompanied by phosphorylation of Ca2+/calmodulin‐dependent protein kinase kinase β (CaMKKβ) during myocardial ischaemia. Treatment with subtype‐3 of muscarinic acetylcholine receptor (M3R) antagonist 4‐diphenylacetoxy‐N‐methylpiperidine methiodide or AMPK inhibitor Compound C abolished the protective effects of VNS on mitochondrial dynamics and function, suggesting that M3R/CaMKKβ/AMPK signalling are involved in mediating beneficial effects of VNS. This study demonstrates that VNS modulates mitochondrial dynamics and improves mitochondrial function, possibly through the M3R/CaMKKβ/AMPK pathway, to attenuate ISO‐induced cardiac damage in rats. Targeting mitochondrial dynamics may provide a novel therapeutic strategy in IHD.