Vaughan joined the Union Army as a second lieutenant in the 2nd Wisconsin Volunteer Infantry Regiment on June 11, 1861. He resigned his commission on September 16, 1861. He rejoined the army on March 31, 1862 as a captain in the 19th Wisconsin Volunteer Infantry Regiment. He was promoted to major on January 22, 1864. He later took part in the Siege of Petersburg. When Richmond, Virginia was occupied by the Union Army on April 3, 1865, the 19th Wisconsin Infantry was the first regiment to reach the city and Vaughan received the distinction of raising the regiment's flag at the city hall. He assumed command of the regiment later that month. He was promoted to lieutenant colonel on May 3, 1865. Vaughn was mustered out of the volunteers on August 9, 1865. He received an appointment as brevet colonel to rank from August 9, 1865, preliminary to his appointment as a brevet brigadier general of volunteers. On February 21, 1866, President Andrew Johnson nominated Vaughn for appointment to the grade of brevet brigadier general of volunteers to rank from August 9, 1865, and the United States Senate confirmed the appointment on April 10, 1866.