Glucose has long been considered a primary energy source for synaptic function. However, it remains unclear to what extent alternative fuels, such as lactate/pyruvate, contribute to powering synaptic transmission. By detecting individual release events in hippocampal synapses, we find that mitochondrial ATP production regulates basal vesicle release probability and release location within the active zone (AZ), evoked by single action potentials. Mitochondrial inhibition shifts vesicle release closer to the AZ center and alters the efficiency of vesicle retrieval by increasing the occurrence of ultrafast endocytosis. Furthermore, we uncover that terminals can use oxidative fuels to maintain the vesicle cycle during trains of activity. Mitochondria are sparsely distributed along hippocampal axons, and we find that terminals containing mitochondria display enhanced vesicle release and reuptake during high-frequency trains. Our findings suggest that mitochondria not only regulate several fundamental features of synaptic transmission but may also contribute to modulation of short-term synaptic plasticity. Display omitted •Synapses can utilize oxidative fuels to sustain various activity levels•Mitochondria regulate probability and nanoscale organization of vesicle release•Mitochondrial inhibition increases the occurrence of ultrafast endocytosis•Mitochondrial localization in synapses enhances vesicle release and retrieval Synaptic transmission is energetically costly. Myeong et al. demonstrate that hippocampal synapses can bypass glycolysis using oxidative fuels. Mitochondria, rather than glycolysis, control the spatiotemporal properties of vesicle release and ultrafast endocytosis. Mitochondrial localization in nerve terminals enhances vesicle release and reuptake, thus representing a form of synaptic plasticity.