The vagus nerve, the longest cranial nerve, plays a critical role in maintaining homeostasis through its complex anatomical structure and diverse physiological functions. Recent studies highlight its unique anti-inflammatory mechanisms, showing that vagus nerve stimulation (VNS) can activate both the cholinergic anti-inflammatory pathway (CAP) and the hypothalamic-pituitary-adrenal (HPA) axis. This leads to a reduction in the release of pro-inflammatory cytokines and alleviation of inflammation. Such neuroimmune regulation provides valuable insights for managing chronic inflammatory diseases, including myocardial ischemia/reperfusion, type 2 diabetes mellitus (T2DM), pneumonia, and Crohn's disease. This review summarizes the functional roles of the vagus nerve in inflammatory diseases and the underlying mechanisms. It discusses how the vagus nerve regulates neural, cardiovascular, metabolic, respiratory, and gastrointestinal disorders through neurotransmitters, receptors, and anti-inflammatory pathways. Specifically, VNS has been shown to reduce inflammation by releasing acetylcholine, which binds to alpha 7nAChR on immune cells and inhibits the production of pro-inflammatory cytokines. Both clinical and preclinical studies emphasize the effectiveness of non-invasive VNS in treating conditions such as stroke, heart failure, atrial fibrillation, and acute respiratory distress syndrome (ARDS), further supporting the vagus nerve's potential as a therapeutic target. This paper also emphasizes the need for future research to better understand the specific mechanisms by which the vagus nerve modulates immune responses. Furthermore, validating the safety and efficacy of VNS through multi-center clinical trials is essential, alongside exploring personalised therapies using advanced biotechnology for precise modulation. As a key regulator of the nervous system, exploring the vagus nerve's role in immune regulation and its therapeutic potential offers significant insights for disease prevention and treatment.