Though we know he was born in Linlithgow, Scotland on 21 January 1819, not much is known about James Yates' early life, but it is believed he apprenticed at his stepfather's boat yard. He entered the HBC as early as 1843 as a ship's carpenter on board the Prince Rupert. He arrived in Fort Victoria in 1849 as part of the first band of immigrants and oversaw the discharge and loading of cargo there. He continued to work as a shipwright until the beginning of 1851, when he was discharged as a freeman. He bought land and began selling liquor and real estate, both at which he became a successful businessman. He also assisted in preventing the illegal sale of alcohol to the native people. He was elected to the first Legislative Assembly of Vancouver Island in 1856. Four years later, he left Victoria with his fortune, and took his family back to Scotland where they settled at Porto Bello in Edinburgh.
He was married to Mary Powell, daughter of Welsh architect Evan Powell, in 1848. She came to the West Coast with him. They had seven children, six of which were born on Vancouver Island (though one died there). He was described as having a bad temper, much of which was directed at the HBC itself. Yates Street, Victoria's first main street, is named after him. He built the first saloon in the town; the building which housed his second saloon, the Ship Inn, still stands at 1218 Wharf St and is recognised by its metal columns which extend over the sidewalk there. Another building, the Yates Block at the bottom of Yates Street, also remains. He also owned much of the land along the Gorge. He is credited with helping to shape public policy in Victoria in favour of positive conditions for establishing the province as a material, intellectual, and political power. He died in Scotland on 23 February 1900, following the recent death of his wife.