Bilateral transcutaneous auricular vagus nerve stimulation (taVNS) - a non-invasive neuromodulation technique - has been investigated as a safe and feasible technique to treat many neuropsychiatric conditions. such as epilepsy, depression, anxiety, and chronic pain. Our aim is to investigate the effect of taVNS on neurophysiological processes during emotional and Go/No-Go tasks, and changes in frontal alpha asymmetry. We performed a randomized, double-blind, sham-controlled trial with 44 healthy individuals who were allocated into two groups (the active taVNS group and the sham taVNS group). Subjects received one session of taVNS (active or sham) for 60 min. QEEG was recorded before and after the interventions, and the subjects were assessed while exposed to emotional conditions with sad and happy facial expressions, followed by a Go/No-Go trial. The results demonstrated a significant increase in N2 amplitude in the No-Go condition for the active taVNS post-intervention compared to the sham taVNS after adjusting by handedness, mood, and fatigue levels (p = 0.046), significantly reduced ERD during sad conditions after treatment (p = 0.037), and increased frontal alpha asymmetry towards the right frontal hemisphere during the emotional task condition (p = 0.046). Finally, we observed an interesting neural signature in this study that suggests a bottom-up modulation from brainstem/subcortical to cortical areas as characterized by improved lateralization of alpha oscillations towards the frontal right hemisphere, and changes in ERP during emotional and Go/No-Go tasks that suggests a better subcortical response to the tasks. Such bottom-up effects may mediate some of the clinical effects of taVNS.