Vaughan was the son of Robert and Margaret Vaughan of Monmouth. In 1446 he was appointed to the offices of steward, receiver, and master of the game in Herefordshire and Ewyas, and steward, constable, porter, and receiver of Abergavenny. In 1450, he became master of the king's ordnance. Despite his early association with Jasper Tudor, Earl of Pembroke, Vaughan was accused of plotting against King Henry VI of England as early as 1459. Somehow he regained the king's favour, and in 1460 was appointed keeper of Henry VI's "great wardrobe".
After the defeat of Henry VI by the Yorkists, Vaughan, along with Philip Malpas and William Hatclyf, attempted to take the king's treasure by ship to Ireland. They fell into the hands of French pirates and were ransomed by Edward IV, to whom Vaughan was afterwards loyal. In 1465 he became treasurer of the king's chamber and master of the king's jewels, and was involved in diplomatic missions to Burgundy, including the marriage negotiations for the king's sister, Margaret.
Following the sudden deposition of the prince as King Edward V, Vaughan was arrested and executed by the future King Richard III. The execution is believed to have taken place some time between June 13th and June 25th.
He was married to Eleanor FitzAlan, the widow of Sir Thomas Browne, who likewise was executed in 1460.