His father, Harry Horner, was born in Holíč, then a part of Austria-Hungary. He immigrated to the United States in 1935 and worked as a set designer and art Director. His mother, Joan Ruth (née Frankel), was born into a prominent Canadian family. His brother Christopher is a Writer and documentary filmmaker.

Horner was born in 1953 in Los Angeles, California, to Jewish immigrants.

James Horner started playing piano at the age of five. he also played violin. He spent his early years in London, where he attended the Royal College of Music. He returned to America, where he attended Verde Valley School in Sedona, Arizona, and later received his bachelor's degree in music from the University of Southern California. After earning a master's degree, he started work on his doctorate at the University of California, Los Angeles (UCLA), where he studied with Paul Chihara, among others. After several scoring assignments with the American Film Institute in the 1970s, he finished teaching a course in music theory at UCLA, then turned to film scoring. Horner was also an avid pilot, and owned several small airplanes.

Horner's first credit as a feature-film Composer was for B-movie Director and Producer Roger Corman's Battle Beyond the Stars. As his work gained notice in Hollywood, Horner was invited to take on larger projects. One of his first major scores was for 1979's The Lady in Red.

Throughout the 1980s, 1990s and 2000s, Horner wrote orchestral scores for family films (particularly those produced by Steven Spielberg's Amblin Entertainment), with credits for An American Tail (1986); The Land Before Time (1988); The Rocketeer and An American Tail: Fievel Goes West (1991); Once Upon a Forest and We're Back! A Dinosaur's Story (1993); The Pagemaster (1994); Casper, Jumanji and Balto (1995); Mighty Joe Young (1998); and How the Grinch Stole Christmas (2000).

Horner's big break came in 1982 when he was asked to score Star Trek II: The Wrath of Khan. It established him as an A-list Hollywood Composer. Director Nicholas Meyer quipped that Horner was hired because the studio could no longer afford the first Trek movie's Composer, Jerry Goldsmith; but that by the time Meyer returned to the franchise with Star Trek VI: The Undiscovered Country, the studio could not afford Horner either.

In 1987, Horner's original score for Aliens brought him his first Academy Award nomination. "Somewhere Out There," which he co-composed and co-wrote with Barry Mann and Cynthia Weil for An American Tail, was also nominated that year for Best Original Song.

Horner scored six films in 1995, including his commercially successful and critically acclaimed works for Braveheart and Apollo 13, both of which received Academy Award nominations.

Horner was criticized for reusing passages from his earlier compositions, and for featuring brief excerpts and reworked themes from classical composers. For Example, his scores from Star Trek II: The Wrath of Khan and Star Trek III: The Search for Spock include excerpts from Prokofiev's Alexander Nevsky and Romeo and Juliet; the famous action ostinato from Aliens is originally from Wolfen; the heroic theme from Willow is based on that of Robert Schumann's Rhenish Symphony; Field of Dreams includes cues from the "Saturday Night Waltz" portion of Aaron Copland's Soundtrack to Our Town, and the climactic battle scene in Glory includes excerpts from Wagner and Orff. Some critics felt these propensities made Horner's compositions inauthentic or unoriginal. In a 1997 issue of Film Score Monthly, an editorial review of Titanic said Horner was "skilled in the adaptation of existing music into films with just enough variation to avoid legal troubles".

Horner won two Academy Awards, for Best Original Dramatic Score (Titanic) and Best Original Song ("My Heart Will Go On") in 1998, and was nominated for an additional eight Oscars. He also won two Golden Globe Awards, three Satellite Awards, three Saturn Awards, and was nominated for three British Academy Film Awards.

After Titanic, Horner continued to compose for major productions, including The Perfect Storm, A Beautiful Mind, Enemy at the Gates, The Mask of Zorro, The Legend of Zorro, House of Sand and Fog and Bicentennial Man. He also worked on smaller projects such as Iris, Radio and Bobby Jones: Stroke of Genius. He received his eighth and ninth Academy Award nominations for A Beautiful Mind (2001) and House of Sand and Fog (2003), but lost on both occasions to Composer Howard Shore.

In 2005, the American Film Institute unveiled their list of the top twenty-five American film scores. Five of Horner's scores were among 250 nominees, making him the most nominated Composer to not make the top twenty-five.

Horner composed the 2006–2011 theme for the CBS Evening News, which was introduced during the debut of anchor Katie Couric on September 5, 2006. He wrote various treatments of the theme, explaining, "One night the show might begin with the Iranians obtaining a nuclear device, and another it might be something about a flower show... The tone needs to match the news."

Horner collaborated again with James Cameron on his 2009 film Avatar, which became the highest-grossing film of all time, surpassing Cameron's own Titanic. Horner worked exclusively on Avatar for over two years. He said, "Avatar has been the most difficult film I have worked on, and the biggest job I have undertaken... I work from four in the morning to about ten at night, and that’s been my way of life since March. That's the world I'm in now, and it makes you feel estranged from everything. I'll have to recover from that and get my head out of [it]."

After Avatar, Horner wrote the score for the 2010 version of The Karate Kid, replacing Atli Örvarsson. In 2011, he scored Cristiada (also known as For Greater Glory), which was released a year later; and Black Gold. In 2012 he scored The Amazing Spider-Man, starring Andrew Garfield. In an interview on his website, Horner revealed why he didn't return to compose the second movie; that he didn't like how the movie resulted in comparison to the first movie, and even called the movie "dreadful." Upon his departure, he was replaced by Hans Zimmer.

In October 2013, Horner received the Max Steiner Award at the Hollywood in Vienna Gala, an award given for extraordinary achievement in the field of film music.

In 2014, Horner wrote Pas de Deux, a double concerto for violin and cello. Commissioned to mark 175th season of the Royal Liverpool Philharmonic Orchestra, the work was premiered on November 12, 2014 by Mari and Håkon Samuelsen, with the orchestra conducted by Vasily Petrenko. Horner also composed Collage, a concerto for four horns, premiered on March 27, 2015 at London's Royal Festival Hall by the London Philharmonic Orchestra conducted by Jaime Martín, with soloists David Pyatt, John Ryan, James Thatcher and Richard Watkins.

On June 22, 2015, news services reported that Horner was presumed to have died when his Short Tucano turboprop aircraft, registration number N206PZ, crashed into the Los Padres National Forest near Ventucopa, California. The following day, his representatives at the Gorfaine/Schwartz Agency posted a message on their website stating that Horner, the only person aboard the aircraft, was killed. His attorney confirmed Horner was in the airplane when it took off after fueling at Camarillo Airport. On June 25, the Ventura County Medical Examiner's Office confirmed Horner's death and ruled the crash an accident. The National Transportation Safety Board's accident ID is WPR15FA195. He is survived by his wife, Sara Elizabeth Horner (née Nelson), and two daughters.