Vaughan was commissioned lieutenant on 22 February 1788, and during the Spanish Armament was appointed the fifth lieutenant of the Vengeance 74, Captain Sir Thomas Rich, on 6 July 1790, although this commission was cancelled.
Going out to the West Indies at the end of 1793 with Vice-Admiral Sir John Jervis’ fleet, he served in the Leeward Islands campaign from January 1794 and was promoted commander of the Zebra 16 on 23 April in succession to the posted Captain Richard Bowen, who himself had only held the command for a matter of weeks. In the autumn the Zebra was at Halifax, Nova Scotia, and in October she sailed from Virginia for Martinique, whereupon Commander Lancelot Skynner assumed her command.
By the summer of 1795 Vaughan was commanding the Matilda 24 in the Leeward Islands, which vessel as the Jacobin 24 had been captured by the Montagu 74, Captain William Fooks, and Ganges 74, Captain William Truscott, on the previous 30 October.
On 24 November 1795 he was posted captain of the Alarm 32, and in early 1796 he captured or destroyed three privateers in the Gulf of Paria off Trinidad and re-took four of their captures. Continuing to cruise off the Spanish territory, on 8 May an incident occurred, reportedly involving the French, in which it was alleged that two of his officers were wounded and he narrowly escaped death. The next morning, he landed on the quay with a hundred men but soon found himself confronted by some three or four thousand armed citizens. The Spanish governor and Spanish officers from the garrison prevailed upon Vaughan to re-embark his men, although there was a further incident later that day and tensions remained high, particularly amongst some British subjects ashore. The incident was mentioned amongst several others in the decree dated 5 October 1796 initiated by the King of Spain to justify the Spanish declaration of war on Britain.
Shortly after the incident at Trinidad Captain Vaughan died of yellow fever in the West Indies, with his passing being reported in British newspapers towards the end of August.