Douglas' mother, Lula Pearl, died 23 days before the title bout. Douglas surprised the world by dominating the fight from the beginning, utilizing his 12-inch reach advantage to perfection, seemingly hitting Tyson at will with powerful jabs and right hands and skillfully dancing out of range of Tyson's own punches. The champion was sluggish, refusing to move his head and slip his way in—his usual strategy—but rather setting his feet and throwing big, lunging punches. By the fifth round, Tyson's left eye was swelling shut from Douglas' many right hands, and ringside HBO announcers proclaimed it was the most punishment they had ever seen the champion absorb.
Tyson's cornermen appeared to be unprepared for the suddenly dramatic situation. They had not brought an endswell to the fight, so they were forced to put ice water into a latex glove to hold over Tyson's swelling eye. By the end of the fight, Tyson's eye had swollen almost completely shut. In the eighth round Tyson delivered a right uppercut, knocking Douglas down. The count issued by the referee engendered controversy. Observers have stated that Douglas was on the canvas for 14 seconds because the referee started the count late without checking with the ringside time-keeper. Regardless, Douglas was able to get up and continue the fight.
Tyson came out aggressively in the ninth round and attempted to end the fight with one big punch. Douglas continued to utilize his strategy and held Tyson at bay with his jab. In the tenth round, boxing history was made as Douglas dominated from the outset, scoring a huge uppercut, followed by a rapid combination, and knocking Tyson down for the first time in his career. Tyson struggled to his knees and picked up his mouthpiece lying on the mat next to him. He awkwardly attempted to place it place back into his mouth. The image of Tyson with the mouthpiece hanging crookedly from his lips would become an enduring image from the fight. He was unable to beat the referee's count, and Douglas was the new heavyweight champion of the world.
Douglas would have only one title defense. On October 25, 1990, Douglas was knocked out in the third round by Evander Holyfield and decided to retire from boxing following his defeat.
He did little for the next several years, living off his wealth (he received a reported $24.6 million for the Holyfield fight) and gaining weight to nearly 400 pounds. It was only after Douglas nearly died during a diabetic coma that he decided to attempt a return to the sport. He went back into training and made a comeback. He was successful at first, but his comeback almost came to a halt in a 1997 disqualification win over journeyman Louis Monaco. In a bizarre ending, Monaco landed a right hand just after the bell to end round one that knocked Douglas to the canvas. Douglas was unable to continue after a five-minute rest period and was consequently awarded the win by disqualification (on account of Monaco's illegal punch).
The next year Lou Savarese knocked him out in the first round, and he hung up his gloves again. He finished his career by winning his last two fights and retiring in 1999.
According to public court filings, Douglas currently resides near the city of Johnstown in McKean Township twenty miles east of Columbus.
Douglas was the star of the video game James 'Buster' Douglas Knockout Boxing for the Sega Master System and Sega Genesis. (In reality, Sega took a pre-existing game, Final Blow, changed the name, and changed one of the character's names to Douglas'). This game is considered as a response to Nintendo's Mike Tyson's Punch-Out!!, especially since Tyson lost to Douglas, which Sega took advantage in order to promote their early Genesis does what Nintendon't advertisements.