Vaughn was born in Minneapolis, Minnesota. His mother, Sharon Eileen (née DePalmo), a native of Hamilton, Ontario, Canada, is a real estate agent and stockbroker who was once ranked as one of the United States' top money managers by Bloomberg Wealth Manager magazine. His father, Vernon L. Vaughn, worked as a salesman for a meat company. His parents divorced in 1991. Vaughn has two older sisters, Valerie and Victoria. He was raised "both Protestant and Catholic" by his Catholic mother and Protestant father, and has English, Irish, German, Lebanese, and Italian ancestry.

Vaughn grew up in Buffalo Grove, Illinois, where he played football and wrestled; he has, though, called himself unathletic and "very average" at sports in high school. He then moved to Lake Forest, Illinois, where he graduated from Lake Forest High School in 1988, with award-winning writer Dave Eggers, sports agent Rob Pelinka, and fellow actor Don Tiffany. In high school, he was a tall, scrawny kid, known as a class clown and avid prankster. He was introduced to musical theater at a young age and decided to become an actor in 1987. He has credited his mother as the inspiration behind his career, saying: "I saw her overcome stuff, and I thought if you worked hard at something you'd give yourself a chance."

In 1988, Vaughn was cast in a Chevrolet television commercial, and subsequently moved to Hollywood, where he came in contact with the inspiration for all of his work. Although he appeared in the 1989 season of the television series, China Beach and in three CBS Schoolbreak Specials (in 1990), he was a struggling actor and faced many rejections. His first film role was 1993's Rudy, playing as Jamie O'hare. Two years later, he was cast a lead role in a proposed revival of 77 Sunset Strip, that was to air on the fledgling WB Television Network, but the project ceased development after initial testing. Vaughn did not receive wider success until his role in 1996's Swingers with Jon Favreau. Swingers was released in July 1996, and became a successful independent film. Vince's father Vernon also did a cameo in this film.

Afterwards, director Steven Spielberg cast Vaughn in the blockbuster The Lost World: Jurassic Park, which gave him increased exposure. From there, Vaughn went on to appear in several films of varied success, including playing Norman Bates in the 1998 remake of Alfred Hitchcock's Psycho. In 2000, he starred in The Cell with Jennifer Lopez, and in 2001, appeared in Made, another film penned by Favreau. Vaughn also appeared in Dwight Yoakam's directorial debut movie South of Heaven, West of Hell.

Since Vaughn's role in the successful 2003 comedy, Old School, his profile skyrocketed, and his notoriety improved. In 2004, he appeared alongside Ben Stiller in the hit films Starsky & Hutch and Dodgeball, Anchorman, and had roles in 2005's Be Cool, Thumbsucker and Mr. & Mrs. Smith.

Also in 2005, Vaughn starred alongside Owen Wilson in the comedy Wedding Crashers, which grossed over $200 million at the United States box office. After this series of roles, Vaughn was dubbed one of the Hollywood Frat Pack, a group of actors who frequently co-star in film comedies. In 2006, Vaughn starred with Jennifer Aniston in the comedy-drama The Break-Up (also with Favreau and his father).

In 2007, Vaughn also starred in a comedy called Fred Claus, in which he played the sarcastic, wild-at-heart older brother of Santa Claus (Paul Giamatti). Fred Claus was directed by David Dobkin, who previously directed Vaughn in Wedding Crashers, and co-starred Elizabeth Banks and Kevin Spacey. Next, he momentarily moved from comedy to drama in Sean Penn's critically acclaimed film Into the Wild, a film about the adventures of Christopher McCandless, which was also a best-selling book by Jon Krakauer. He played the role of Wayne Westerberg opposite Emile Hirsch as McCandless.

In 2009, Vaughn starred in Couples Retreat, a comedy chronicling four couples who partake in therapy sessions at a tropical island resort. Malin Åkerman played his wife. Vince's father Vernon portrayed his father in this film.

In February 2010, Vaughn was among the nearly 80 musicians and actors to sing on the charity-single remake of We Are the World.

Vaughn will next film Ron Howard's upcoming comedy, Cheaters, scheduled for release in January 2011.