He served in both Germany and North America during the Seven Years' War, leading a division of grenadiers with great distinction at the capture of Martinique.

He entered the British Parliament in 1774 as member for Berwick-upon-Tweed, holding the seat for the remaining twenty years of his life.

He led the grenadiers at the Battle of Long Island, and was wounded in the thigh; he commanded a column in the Battle of Short Hills, New Jersey, in July 1777, and he commanded a column during the successful assault on Fort Clinton and Fort Montgomery, where his horse was killed under him.

In 1779, he returned to England but was immediately appointed Commander-in-Chief in the Leeward Islands Vaughan served in the West Indies from 1779 until 1782, taking a leading part in Rodney's Capture of St Eustatius in 1781, a successful campaign aimed at neutralizing the Dutch port which was used to store and send supplies to the American colonists during their Revolutionary War.

Later in the year he was accused of embezzling the property confiscated at St Eustatius, and was forced to defend himself against Burke's attack in Parliament, stating that he had not profited by a shilling and had always acted in the national interest rather than his own.