Miranda, who had bought himself a commission as a General of the Spanish Army around 1771 (something not unusual in the European armies at the time), became interested in the American Revolutionary War, while serving as Captain of the Aragon Regiment and aide-de-camp to General Juan Manuel de Cajigal y Monserrat, (1739 – 1811). Under Cajigal, Miranda participated in the 1781 Battle of Pensacola, which saw British West Florida fall into Spanish hands, and was promoted to lieutenant colonel. He participated in the Capture of The Bahamas and carried news of the island's fall to his superior Bernado de Galvez. Galvez was angry that the Bahamas expedition had gone ahead without his permission and he imprisoned Cajigal and had Miranda arrested. Miranda was later released, but this experience of Spanish officialdom may have been a factor in his subsequent conversion to the idea of independence for Spain's American colonies.

He later returned to the United States in 1783, where he met, among others, George Washington, Thomas Paine, Alexander Hamilton, Henry Knox, and Thomas Jefferson, embarking from Boston for England on December 15, 1784.

Much later, after his adventures in England, (until August 9, 1785), Miranda went to Venice, Padua, Verona, Mantua, Parma, Modena, Bologna, Florence, Pisa, Lucca, Livorno, Rome and Naples, (from November 12, 1785 to around March 16, 1786 where he moved on April 2, 1786 to the modern-day Dubrovnik, then named Ragusa and a vassal city of the Ottoman Empire), Istanbul in Turkey (until September 23, 1786), Russia, (from September 26, 1786 until September 7, 1787, slightly under one year), Sweden, (in Stockholm as from September 10, 1787 until November 2, 1787), Norway, (from November 10, 1787 until departing from Karlskrona in Sweden from December 17, 1787), Denmark (from September 23, 1787 until March 10, 1788 after being received in Denmark orders of capture from Spain no later than January 22, 1788), the Free Hanseatic Town of Hamburg, (from (April 1, 1788 until the April 27, 1788), the Free Town of Bremen, (leaving on April 27), Holland, (from around the May 2, 1788 until around June 16, 1788), some actual Belgian towns and German cities along the Rhine river, Swiss Basel, (arrival July 30, 1788, and then again after touring German-speaking Switzerland on October 12, 1788), Swiss Geneva (arrival September 25, 1788), and France, (entry around the 3rd and 4th weeks of September 1788, two stays in Marseilles, the second departing there towards Bordeaux on February 26, 1789 via inland waterways), travels to Rouen, Le Havre and Paris around May 5, 1789, getting papers as "Mr. Meeroff from Livonia" to arrive in Dover, (England) and then London on June 19, 1789, (taking lodgings at the house of his British friend, "A Barlow", at 47 Jermyn Street).

The attempts to abduct Miranda by the diplomatic representatives of Spain failed as the Russian Ambassador in London, Semyon Vorontsov, declared on August 4, 1789 to the Secretary of State for Foreign Affairs, Francis Osborne, 5th Duke of Leeds, that Sebastian de Miranda, although a Spanish subject, was a member of the Russian diplomatic mission in London at the service of H.R.H. Empress Catherine II of Russia. His letter to Catherine II is a good example of the lecherous manners of some of the eighteenth-century courtesans. In Russia, he used the surname Meeroff and he left several children who latter emigrated to the US and Argentina and are currently well known academicians.

Miranda made use of the Spanish-British diplomatic row known as the Nootka Crisis in February 1790 to present to some British Cabinet ministers his ideas about the independence of Spanish territories in South America. Later on, after fighting for Revolutionary France, Miranda made his home in London, where he had two children, Leandro (1803 – Paris, 1886) and Francisco (1806 – Cerinza, Colombia, 1831), with his housekeeper, Sarah Andrews, whom he later married. During this earlier times in London he had met Colonel William S. Smith, secretary to John Adams's American Legation.

From 1791, Miranda took an active part in the French Revolution. In Paris, he befriended the Girondists Jacques Pierre Brissot and Jérôme Pétion de Villeneuve, and he briefly served as a general in the section of the French Revolutionary Army commanded by Charles François Dumouriez, fighting in the 1792 campaign in the Low Countries. Miranda was first arrested in April 1793 on the orders of Antoine Quentin Fouquier-Tinville, Chief Prosecutor of the Revolution, and accused of conspiring against the republic with Charles François Dumouriez, the renegade general. Though indicted before the Revolutionary Tribunal – and under attack in Jean-Paul Marat's L'Ami du peuple – he conducted his defence with such calm eloquence that he was declared innocent. Even so, the campaign of Marat and the rest of the Jacobins against him did not weaken. He was arrested again in July 1793, when he was incarcerated in La Force prison, effectively one of the ante-chambers of death during the prevailing Reign of Terror. Appearing again before the tribunal, and mustering all his soldierly courage, he accused the Committee of Public Safety of tyranny, in disregarding his previous acquittal.

Miranda seems to have survived by a combination of good luck and political expediency: the revolutionary government simply could not agree what to do with him. He remained in La Force even after the fall of Robespierre in July 1794, and was not finally released until the January of the following year. Now convinced that the whole direction taken by the Revolution had been wrong, he started to conspire with the moderate royalists against the Directory, and was even named as the possible leader of a military coup. He was arrested and ordered out of the country, only to escape and go into hiding. He reappeared after being given permission to remain in France, though that did not stop his involvement in yet another monarchist plot in September 1797. The police were ordered to arrest the "Peruvian general", as the said general submerged himself yet again in the underground.

With no more illusions about France, or the Revolution, he left for England in a Danish boat, arriving in Dover in January 1798. His name remains engraved on the Arc de Triomphe, which was built during the First Empire. His life has long been associated with the struggle of the Spanish colonies in Latin America for independence. Miranda envisioned an independent empire consisting of all the territories that had been under Spanish and Portuguese rule, stretching from the Mississippi River to Cape Horn. This empire was to be under the leadership of a hereditary emperor called the "Inca", in honor of the great Inca Empire, and would have a bicameral legislature. He conceived the name Colombia for this empire, after the explorer Christopher Columbus.

With informal British help, Miranda led an attempted invasion of the Captaincy General of Venezuela in 1806. At the time Britain was at war with Spain, an ally of Napoleon. In November 1805 Miranda travelled to New York, where he rekindled his acquaintance with Colonel William S. Smith, who introduced him to merchant Samuel G. Ogden (who would later be tried, but acquitted, for helping organize Miranda's expedition). Miranda then went to Washington for private meetings with President Thomas Jefferson and his Secretary of State James Madison, who met with Miranda but did not involve themselves or their nation in his plans, which would have been a violation of the Proclamation of Neutrality of 1793. Miranda privately began organizing a filibustering expedition to liberate Venezuela. Among the volunteers who served under him in this revolt was David G. Burnet of the United States, who would later serve as interim president of the Republic of Texas after its secession from Mexico in 1836. Miranda hired a ship from Ogden, which he rebaptized the Leander in honor of his oldest son.

In Jacmel, Haiti, Miranda acquired two other ships, the Bee and the Bacchus, and their crews. It is here in Jacmel on March 12, when Miranda made, and raised on the Leander, the first Venezuelan flag, which he had personally designed. On April 28 the small fleet was overtaken by Spanish war ships off the coast of Venezuela. Only the Leander escaped. Sixty men were captured and put on trial, and ten were sentenced to death. The Leander and the expeditionary force regrouped on the British islands of Barbados and Trinidad. The expedition landed at La Vela de Coro on August 3, captured the fort and raised the flag for the first time on Venezuelan soil. Before dawn the next morning the expeditionaries occupied Coro, but found no support from the city residents. Rather than risk a defeat, the small royal force in the city fell back from the city escorting refugees and to await reinforcements. Realizing that he could not hold the city for long, Miranda ordered his force to set sail again on August 13, and he spent the next year in the British Caribbean waiting for reinforcements that never came. On his return to Britain, he was met with better support for his plans from the British government. In 1808 a large military force to attack Venezuela was assembled and placed under the command of Arthur Wellesley, but Napoleon's invasion of Spain suddenly transformed Spain into an ally of Britain, and the force instead went there to fight in the Peninsular War.

Venezuela achieved de facto independence on April 19, 1810, when a junta was established and the colonial administrators deposed. The Junta sent a delegation to Great Britain to get British recognition and aid. This delegation, which included future Venezuelan notables Simón Bolívar and Andrés Bello, met with and persuaded Miranda to return to his native land. There he agitated for the provisional government to declare independence. Miranda gathered around him a group of similarly-minded individuals and helped establish an association, la Sociedad Patriotica, modeled on the political clubs of the French Revolution. By the end of the year the Venezuelan provinces elected a congress to deal with the future of the country, and Miranda was chosen as the delegate from El Pao, Barcelona Province. On July 5, 1811, it formally declared Venezuelan independence and established a republic. The congress also adopted his tricolor as the Republic's flag.

The following year Miranda and the young Republic's fortunes turned. Republican forces failed to subdue areas of Venezuela which had remained royalist. In addition, Venezuela's loss of the Spanish market for its main export, cocoa, meant that an economic crisis set in, which mostly hurt the middle and lower classes, who lost enthusiasm for the Republic. Finally a powerful earthquake and its aftershocks hit the country, which caused large numbers of deaths and serious damage to buildings, mostly in republican areas. It did not help that it hit on March 26, 1812, as services for Maundy Thursday were beginning. The Caracas Junta had been established on a Maundy Thursday as well, so the earthquake fell on its second anniversary in the liturgical calendar. This was interpreted by many as a sign from Providence, and many, including those in the Republican army, began to secretly plot against the Republic or outright defect. Other provinces refused to send reinforcements to Caracas Province. Worse still, whole provinces began to switch sides. On July 4, an uprising brought Barcelona over to the royalist side. Neighboring Cumaná, now cut off from the Republican center, refused to recognize Miranda's dictatorial powers and his appointment of a commandant general. By the middle of the month many of the outlying areas of Cumaná Province had also defected to the royalists. With these circumstances a Spanish marine frigate captain, Domingo Monteverde, operating out of Coro, was able to turn a small force under his command into a large army, as people joined him on his advance towards Valencia, leaving Miranda in charge of only a small area of central Venezuela. In these dire circmstances the government appointed Miranda generalissimo, with broad political powers. By mid-July Monteverde had taken Valencia, and Miranda thought the situation was hopeless. He started negotiations with Monteverde and finalized an armistice on 25 July 1812. He then went to the port of La Guaira intending to leave on a British ship before the royalists arrived, although under the armistice there was an amnesty for political offenses. Then-Colonel Bolívar and other revolutionary officers claimed that they regarded this action as treasonous. In one of Bolívar's most morally dubious acts, Bolívar and the others arrested and handed Miranda over to the Spanish Royal Army. Bolívar claimed afterwards that he wanted to shoot him as a traitor but was restrained by the others; Bolívar's reasoning was that "if Miranda believed the Spaniards would observe the treaty, he should have remained to keep them to their word; if he did not, he was a traitor to have sacrificed his army to it".  Ironically, it was by handing over Miranda to the Spanish that Bolívar assured himself a passport from the Spanish authorities (passports which, nevertheless, had been guaranteed to all republicans who requested them by the terms of the armistice), which allowed him to leave Venezuela unmolested.

Miranda never saw freedom again. His case was still being processed, when he died in a prison cell at the Cuatro Torres Fort at the Arsenal of La Carraca, outside of Cádiz in 1816. He was buried in a mass grave, making it impossible to identify his remains, so an empty tomb has been left for him in the National Pantheon of Venezuela. The oil painting by the Venezuelan artist Arturo Michelena titled, Miranda en la Carraca (1896), which portrays the hero in the Spanish jail where he died, has become a graphic symbol of Venezuelan history, and has immortalized the image of Miranda for generations of Venezuelans.