The son of Major Stuart Jones and Helen Jones was educated in the Duke of York's Royal Military School, Dover and Exeter University, where received a Bachelor of Arts in theology in 1970. He was further educated in Alsager College, Keele, where he graduated with a Postgraduate Certificate in Education (PGCE) in drama and religious education in 1971, and Wycliffe Hall, Oxford.
From 1971 to 1974, Jones was teacher in the Sevenoaks School and led one of the first Community Service programmes in schools. He was also co-founder of the first Volunteer Bureau in England. Between 1975 and 1981, he was producer at Scripture Union, later curate, then associate vicar of Christ Church in the Diocese of Bristol. Jones was visiting lecturer in media studies at Trinity College, Bristol, and from 1990 to 1994 vicar of Emmanuel Church, South Croydon in the Diocese of Southwark and the Bishop of Southwark's examining chaplain. In 1994, he became Suffragan Bishop of Hull in the Diocese of York, a post he held until 1998, when he was appointed 7th Bishop of Liverpool.
He is an evangelical, and was one of the group of bishops who signed a letter opposing the proposed appointment of the Revd Dr Jeffrey John as Bishop of Reading in 2003. In 2008, Bishop James Jones apologised for opposing the gay cleric.
Bishop James married Sarah Marrow in 1980; they have three daughters.