James inherited from his father a realm including three of the Balearic Islands (Majorca, Ibiza, and Formentera), the counties of Roussillon and Cerdanya, the dominion of Montpellier, the barony of Aumelàs, and the viscounty of Carladès.

He also gained tribute from the fourth Balearic island, Menorca, which remained under Muslim control throughout his life.

In 1276, his former seneschal, Ramon Llull persuaded James to fund a language school for Franciscan missionaries at Miramar.

James held rights over borderlands that were indefensible and, in anticipation of an invasion, reached an agreement with king Philip III of France (the widower of his sister, Isabella).

He implemented a vast policy of agricultural colonisation with the creation of rural centres; increase royal rents; favoured the creation of a consulate in the Kingdom of Granada; created a new monetary system for the kingdom; promoted the creation of textile industries; proceeded to increase the power of the crown over that of the nobility and the Church; and ordered the construction of several palaces and castles, including the palace at Perpignan, the Palace of Almudaina, the Cathedral of Santa María at Palma de Mallorca, known today as La Seu, and, finally, Bellver Castle.