With the fast growing population of Waterfoot and the strain this was putting on seating at Newchurch parish church it was decided to erect a church nearer to the village centre. Building work started in 1864 and on 23rd November 1865 the new church was consecrated, with the first service being held on 26th November.

The new parish was created out of the larger Bury, Rochdale and Newchurch parishes. The church spire with 6 bells and three clock faces were added later and a service of dedication for the spire was held 13th December 1873.

In 1994 the Rev Trevor Richardson, who had been vicar of St James' for thirty five years, was having doubts over the direction the Anglican church was taking which culminated in his opposition to the ordination of women into the priesthood. Reverend Richardson resigned as vicar of St James and was accepted into the Roman Catholic church where he was ordained as a priest at St James the Less, Rawtenstall.

The resignation of the vicar in 1994 along with a dwindle congregation lead to demise of the church and the last service was held on 22nd November 1998. The parish was split up with part of it going to St Anne's, Edgeside and the remainder being returned to St Nicholas, Newchurch.