Chronic vagus nerve stimulation (VNS) has been shown to facilitate learning, but effects of acute VNS on neural coding and behavior remain less well understood. Ferrets implanted with cuff electrodes on the vagus nerve were trained by classical conditioning on an auditory tone frequency-reward association. One tone was associated with reward while another tone was not. Tone frequencies and reward associations were changed every 2 d, requiring learning of a new relationship. When tones were paired with VNS, animals consistently learned the new association within 2 d. When VNS occurred randomly between trials, learning within 2 d was unreliable. In passively listening animals, neural activity in primary auditory cortex (A1) and pupil size were recorded before and after acute VNS-tone pairing. After pairing with a neuron's best-frequency (BF) tone, responses by a subpopulation of neurons were reduced. VNS paired with an off-BF tone or during intertrial intervals had no effect. The BF-specific reduction in neural responses after VNS remained, even after regressing out changes explained by pupil-indexed arousal. VNS induced brief dilation in the pupil, and the size of this change predicted the magnitude of persistent changes in the neural response. This interaction suggests that fluctuations in neuromodulation associated with arousal gate the long-term VNS effects on neural activity.