Hale Irwin, who was trying to win this event for the third time, posted a 68 to join Tom Wargo in a tie for second at 11-under-par 205. Overnight leader Mike McCullough managed a 1-under 71 to finish one shot further back at 10- under-par 206 along with Jerry Pate and Mike Reid.
James was in the final group at The Club at TwinEagles on Sunday and along with Irwin stood two shots behind McCullough. James made a move early, however, with a birdie at the second and another at the par-4 fourth after his second shot stopped 8 feet from the hole.
James drained an 18-foot putt for a birdie at the par-5 sixth and knocked his approach inside 12 feet for a birdie at the par-4 ninth. The Englishman then birdied the par-4 11th to open a three-shot lead over the field at minus-12.
He found trouble at the par-5 13th after he left his third shot in a bunker and walked away with a bogey. Moments later, James' edge was gone as his challengers made some late runs.
Wayne Levi jumped to 11 under with a birdie at the par-5 17th, but his quest for the title ended at the closing hole when he dropped his second shot in the water.
McCullough, who had fallen off the pace with back-to-back bogeys from the 12th, birdied the 14th and then holed out for an eagle at the par-4 15th. He added a birdie at the 16th and converted a 6-foot putt for a birdie at the 17th to grab a share of first.
Irwin was also in the mix down the stretch and sank a long eagle putt at the 17th to join the logjam at 11 under.
'That little stretch at the end, Hale and I said to each other 'okay, lets birdie the last five holes,'' said McCullough. 'Mark did a good job today. Nobody put any heat on him until the end.'
With the difficult par-4 18th remaining, McCullough hit his second shot in the drink while Irwin's approach flew over the flag and bounced through the green. James then safely reached the green and rolled in a 25-footer for a closing birdie and the win.
'It's very satisfying to win again,' said the former European Ryder Cup captain, who captured last year's Ford Senior Players Championship. 'The wins here in the U.S. mean a lot. Winning last year and here is a huge thrill.'
Levi's double bogey at 18 left him at 9-under-par 207 after a round of 67.
Bruce Lietzke, Morris Hatalsky, Des Smyth and Tom Jenkins tied for eighth place at 8-under-par 208.
Two-time U.S. Open champion Curtis Strange completed his Champions Tour debut on a down note Sunday with a double bogey of his own at the 18th. Strange carded a 74 in the final round to finish in a group at 3-over-par 219.