Background: Pursuing goals is compromised when being confronted with interfering information. In such situations, conflict monitoring is important. Theoretical considerations on the neurobiology of response selection and control suggest that auricular transcutaneous vagus nerve stimulation (atVNS) should modulate conflict monitoring. However, the neurophysiological-functional neuroanatomical underpinnings are still not understood. Methods: AtVNS was applied in a randomized crossover study design (n = 45). During atVNS or sham stimulation, conflict monitoring was assessed using a Flanker task. EEG data were recorded and analyzed with focus on theta and alpha band activity. Beamforming was applied to examine functional neuroanatomical correlates of atVNS-induced EEG modulations. Moreover, temporal EEG signal decomposition was applied to examine different coding levels in alpha and theta band activity. Results: AtVNS compromised conflict monitoring processes when it was applied at the second appointment in the crossover study design. On a neurophysiological level, atVNS exerted specific effects because only alpha-band activity was modulated. Alpha-band activity was lower in middle and superior prefrontal regions during atVNS stimulation and thus lower when there was also a decline in task performance. The same direction of alpha-band modulations was evident in fractions of the alpha-band activity coding stimulus-related processes, stimulus-response translation processes, and motor response-related processes. Conclusions: The combination of prior task experience and atVNS compromises conflict monitoring processes. This is likely due to reduction of the alpha-band-associated inhibitory gating process on interfering information in frontal cortices. Future research should pay considerable attention to boundary conditions affecting the direction of atVNS effects.