Glucose has long been considered a primary source of energy for synaptic function. However, it remains unclear under what conditions alternative fuels, such as lactate/pyruvate, contribute to powering synaptic transmission. By detecting individual release events in cultured hippocampal synapses, we found that mitochondrial ATP production from oxidation of lactate/pyruvate regulates basal vesicle release probability and release location within the active zone (AZ) evoked by single action potentials (APs). Mitochondrial inhibition shifted vesicle release closer to the AZ center, suggesting that the energetic barrier for vesicle release is lower in the AZ center that the periphery. Mitochondrial inhibition also altered the efficiency of single AP evoked vesicle retrieval by increasing occurrence of ultrafast endocytosis, while inhibition of glycolysis had no effect. Mitochondria are sparsely distributed along hippocampal axons and we found that nerve terminals containing mitochondria displayed enhanced vesicle release and reuptake during high-frequency trains, irrespective of whether neurons were supplied with glucose or lactate. Thus, synaptic terminals can entirely bypass glycolysis to robustly maintain the vesicle cycle using oxidative fuels in the absence of glucose. These observations further suggest that mitochondrial metabolic function not only regulates several fundamental features of synaptic transmission but may also contribute to modulation of short-term synaptic plasticity.