He was the second son of Richard Vaughan, 2nd Earl of Carbery, and his second wife Frances (c.1621 – 9 October 1650), daughter of Sir John Altham of Oxhey, Watford, Hertfordshire.

He inherited his title and the Carmarthenshire estate (Golden Grove) in 1686 on the death of his father.

During his tenure as governor, he unsuccessfully tried to defeat the Jamaican Maroons, who were led at the time by Juan de Serras.

Edward Hyde, 1st Earl of Clarendon, whose impeachment Vaughan strongly supported, called him a man who was "as ugly in face as in fame".

His estates passed to a cousin, another John Vaughan (1693–1765), who rebuilt the Golden Grove mansion.