Mind-body exercises such as Yoga or Qi Gong have demonstrated a wide range of health benefits and hold great promise for employment in clinical practice. However, the psychophysiological mechanism underlying these effects remains unclear. Theoretical frameworks highlight regulation as a characteristic and specific mechanism of mind-body exercise for which empirical evidence is scarce. To investigate the exact nature of this mechanism, we tracked acute changes in autonomic nervous system (ANS) activity and subjective state over a common form of mind-body exercise (Qi Gong). Heart rate variability (HRV) and subjective state were assessed in 42 Qi Gong practitioners from China and Germany during a standard moving Qi Gong exercise (Baduanjin). Relaxation in supine position prior and after the exercise served as a control condition to Qi Gong and to assess changes before and after the exercise. Following Qi Gong, all practitioners reported significantly increased subjective calmness and perceived body activation, attentional focus, and subjective vitality. On the physiological level, a significant decrease of parasympathetic modulation and increase in heart rate indicated a pattern of moderate general physiological activation during Qi Gong. A significant increase in overall RR-interval modulation and cardiac coherence during Qi Gong were indicative of a mechanism of active regulation. Examination of the RR-interval trajectories revealed a rhythmic pattern of ANS activation and deactivation in sync with activating and relaxing segments of the exercise. Significant changes in subjective state, not on the physiological level, before and after the exercise were observed. Significant associations between Qi-Gong-specific beliefs, age, cultural background, and experiential and physiological measures demonstrated the complexity of mind-body exercises as multicomponent interventions. Overall, this study highlights moderate general physiological activation, exercise-dependent rhythmic ANS modulation, and induction of a characteristic state of eutonic calmness as potential psychophysiological mechanisms underlying the health benefits of mind-body exercise.