He was the son of Gabriel, comte de Lauzun, and his wife Charlotte, daughter of the duc de La Force. He was brought up with the children of his relative, the maréchal de Gramont. One of them, Armand, comte de Guiche, became the lover of Henrietta Anne Stuart, Duchess of Orléans, while a daughter, Catherine Charlotte, afterwards princess of Monaco by marriage to Louis de Grimaldi, was the object of the one passion of Lauzun's life.
He entered the army, and served under Turenne, also his kinsman, and in 1655 succeeded his father as commander of the cent gentilshommes de la maison de roi. Puyguilhem (or Péguilin, as contemporaries simplified his name) rapidly rose in Louis XIV's favour, became colonel of the royal regiment of dragoons, and was gazetted maréchal de camp. He and Mme de Monaco belonged to the côterie of the young duchess of Orléans. His rough wit and skill in practical jokes pleased Louis XIV, but his jealousy and violence were the causes of his undoing. He prevented a meeting between Louis XIV and Mme de Monaco, and it was jealousy in this matter, rather than hostility to Louise de la Vallière, which led him to promote Mme de Montespan's intrigues with the king. He asked this lady to secure for him the post of grand-master of the artillery, and on Louis's refusal to give him the appointment he turned his back on the king, broke his sword, and swore that never again would he serve a monarch who had broken his word. The result was a short sojourn in the Bastille, but he soon returned to his functions of court buffoon.
Meanwhile, Anne, Duchess of Montpensier (La Grande Mademoiselle) had fallen in love with the little man, whose ugliness seems to have exercised a certain fascination over many women. He naturally encouraged one of the greatest heiresses in Europe, and the wedding was fixed for December 20 1670, when on the 18th Louis sent for his cousin and forbade the marriage. Mme de Montespan had never forgiven his fury when she failed to procure the grand-mastership of the artillery, and now, with Louvois, secured his arrest. He was removed in November 1671 from the Bastille to Pignerol, where excessive precautions were taken to ensure his safety. He was eventually allowed free intercourse with Fouquet, but before that time he managed to find a way through the chimney into Fouquet's room, and on another occasion succeeded in reaching the courtyard in safety. Another fellow-prisoner, from communication with whom he was supposed to be rigorously excluded, was Eustache Dauger (see The Man in the Iron Mask).
In his reports to his superiors in Paris, the prison governor, Bénigne Dauvergne de Saint-Mars, tells of how Lauzun displayed evidence of crazy behaviour at this time: his cell was a constant mess and he grew his beard to the point that it gave him a wild appearance. An attempted escape was foiled when, on emerging from his tunnel, he came across a maid who raised the alarm.
It was now intimated to Mademoiselle that Lauzun's restoration to liberty depended on her immediate settlement of the principality of Dombes, the county of Eu and the duchy of Aumale - three properties assigned by her to Lauzun - on the little Duc de Maine, eldest son of Louis XIV and Mme de Montespan. She gave way, but Lauzun, even after ten years of imprisonment, refused to sign the documents, when he was brought to Bourbon for the purpose. A short term of imprisonment at Chalon-sur-Saône made him change his mind, but when he was set free Louis XIV was still set against the marriage, which is supposed to have taken place secretly.
Married or not, Lauzun was openly courting Nicolas Fouquet's daughter, whom he had seen at Pignerol. He was to be restored to his place at court, and to marry Mlle Fouquet, who, however, became Mme d'Uzès in 1683.
In 1685 Lauzun went to England to seek his fortune under James II, whom he had served as Duke of York in Flanders. He rapidly gained great influence at the English court. In 1688 he was again in England, and arranged the journey into exile of Mary of Modena and the infant prince, whom he accompanied to Calais, where he received strict instructions from Louis to bring them "on any pretext" to Vincennes.
In the late autumn of 1689 he was put in command of the expedition fitted out at Brest for service in Ireland, and he sailed in the following year. Lauzun was honest, a quality not too common in James II's officials in Ireland, but had no experience of the field, and he blindly followed Richard Talbot, Earl of Tyrconnel. After the battle of the Boyne they fled to Limerick, and thence to the west, leaving Patrick Sarsfield to show a brave front. In September they sailed for France, and on their arrival at Versailles Lauzun found that his failure had destroyed any prospect of a return of Louis XIV's favour.
Mademoiselle died in 1693, and two years later Lauzun married Genevieve de Durfort, a child of fourteen, daughter of the maréchal de Lorges. Queen Mary of Modena, through whose interest Lauzun secured his dukedom, retained her faith in him, and it was he who in 1715, more than a quarter of a century after the flight from Whitehall, brought her the news of the Battle of Sheriffmuir. After his death, the duchy fell to his niece's husband, Charles Armand de Gontaut.