During the 1970s, James played a major role in establishing the smooth jazz genre, appearing with Stanley Turrentine and Milt Jackson on the 1972 album Cherry and with Turrentine on his following album Don't Mess with Mister T. (1973), and that same year was arranging and working as a producer for CTI Records. James was closely associated with Grover Washington, Jr. during Washington's pioneering years at CTI, arranging Washington's albums Inner City Blues (1972), All the King's Horses (1972), Soul Box (1973), Mister Magic (1975), and Feels So Good (1975).
In 1974, James recorded One, his first purely commercial effort as a leader. He later made big-selling albums for his own Tappan Zee label, Columbia, and Warner Bros., including collaborations with Earl Klugh and David Sanborn. James produced Maynard Ferguson's 1975 album Primal Scream and executive produced Ferguson's highly-successful 1976 album Conquistador. "Angela", the 1978 instrumental theme from the sitcom Taxi, is probably James' most well-known work to date. He is also well known for the smooth jazz classics "Nautilus" and "Westchester Lady", the latter from the album Three. In the Philippines, his biggest solo hit was "Sign Of The Times" which was culled from his 1981 album of the same name.
For their first joint album release, One on One, Earl Klugh and James received a Grammy award for Best Pop Instrumental Performance of 1981. James is the founding member of contemporary jazz supergroup Fourplay.
James also received a Grammy award for his collaboration with David Sanborn on the 1986 album Double Vision.[