He was born in Glasgow, Kentucky, where his father was a barber who loved music and inspired Billy to teach himself to play the mandolin at the age of three, while suffering from measles. He went on to learn a number of other instruments.
In 1941 Vaughn joined the United States National Guard for what had been planned as a one-year assignment, but when World War II broke out, he was sent abroad till the war ended in 1945. He decided to make music a career when he was discharged from the army at the end of the war, and attended Western Kentucky State College, now known as Western Kentucky University, majoring in music composition. He had apparently learned barbering from his father, because he did some while studying at Western Kentucky to support himself financially, when he was not able to get jobs playing the piano at local night clubs and lounges. While he was a student there, three other students, Jimmy Sacca, Donald McGuire, and Seymour Spiegelman, who had formed a vocal trio, the Hilltoppers, recruited Vaughn to play the piano with them. He soon added his voice to theirs, converting the trio to a quartet. As a member of the group, he also wrote their first hit song, "Trying," which charted in 1952.
In 1954 he left the group to join Dot Records in Gallatin, Tennessee, as music director. He subsequently formed his own orchestra, which had a hit single in that same year with "Melody of Love." It sold over one million copies, and was awarded a gold disc. He went on to have many more hits over the next decade and a half, and based purely on chart successes, was the most successful orchestra leader of all time.
Vaughn charted a total of 42 singles on the Billboard charts. He also charted thirty six albums on the Billboard 200, beginning with 1958's Sail Along Sil'vry Moon and ending with 1970's Winter World of Love. He also had nineteen Top 40 hits in Germany, beginning with the chart-topping "Sail Along Sil'vry Moon". He had two more number ones in Germany: "La Paloma" and "Wheels" (all three were reportedly million sellers). Billy Vaughn's recording of Wheels was No. 1 for 14 weeks in Germany (Hit Bilanz) as well as No. 1 in India, New Zealand and Italy (Billboard hits of the world, various issues 1961). Vaughn also charted in Australia, Latin America and Japan. "Pearly Shells" was a major success in Japan. Vaughn's tours of that country began about the time "Pearly Shells" was a hit in 1965. Many songs which were not US hits or even singles releases there, were major hits in other countries. These included "Lili Marlene", "zwei Gitarren am Meer", "Blueberry Hill (Germany) and "Greenfields". "Song of Peace", "It's a Lonesome Old Town" (Japan), "Michelle" No 1 in Argentina and Malaysia, "Mexico" No. 1 in the Philippines and "Bonanza" a major success in Brazil and Italy (Billboard Hits of the World, 1960s) plus "Theme from the Dark at the Top of the Stairs" (various Latin American countries). The album La Paloma was a success throughout Latin America. He also had a number one album in Germany in the early 1980s with Moonlight Melodies, which consisted of 20 of Billy's biggest hits (original Dot recordings, original LP notes and credits). The Billy Vaughn Orchestra began touring in 1965 with numerous sell-out tours throughout Japan, Brazil, and Korea.