Born in Denver, Colorado, McDonnell was raised in Little Rock, Arkansas, and graduated from Little Rock High School in 1917. He was a graduate of Princeton University class of 1921, and earned a Master's of Science in Aeronautical Engineering from MIT in 1925. While attending MIT he joined the Delta Upsilon Fraternity. After graduating from MIT, he was hired by Tom Towle for the Stout Metal Airplane Division of the Ford Motor Company. In 1927, he was hired by the Hamilton Metalplane Company to develop similar metal monplanes. He then went on to Huff Daland Airplane Company.
In 1928, McDonnell left Huff Daland and set up J.S. McDonnell & Associates, and with the help of two other engineers, McDonnell set out to design his first aircraft with his company name. This aircraft would then compete in a safe airplane contest sponsored by the Daniel Guggenheim Fund for the Promotion of Aeronautics and offered a $100,000 prize for the winning entry. His design was the Doodle Bug. After the failure of the Doodle Bug to win the contest (the Curtiss Tanager won) or any commercial orders due to the Great Depression, he dissolved his firm and worked for the Great Lakes Aircraft Company in 1931 before he was hired as an engineer for the Glenn L. Martin Company.
McDonnell resigned from Martin in 1938 and founded McDonnell Aircraft Corporation in 1939. Headquartered in St. Louis, the company quickly grew into a principal supplier of fighter aircraft to the U.S. Air Force and U.S. Navy, including the F-4 Phantom II fighter and the Mercury and Gemini space capsules.
In 1967, McDonnell Aircraft merged with the Douglas Aircraft Company to create McDonnell Douglas. Later that year Douglas Aircraft Company's space and missiles division became part of a new subsidiary called McDonnell Douglas Astronautics, located in Huntington Beach, California, producing the Delta series of launch vehicles. The new combined company also developed the F-15 Eagle and F/A-18 Hornet fighters.
He served as chairman of the United Nations Association of the United States, and in 1958 his company became the first organization in the world to celebrate United Nations Day as a paid holiday. In 1980 McDonnell was awarded the NAS Award in Aeronautical Engineering from the National Academy of Sciences.
He was succeeded as Chair of MD by his nephew Sanford N. McDonnell in 1980.
James McDonnell was married twice. His first marriage, to Mary Elizabeth Finney, took place in Baltimore, Maryland, on June 30, 1934. They had two children, James Smith McDonnell, III, born January 28, 1936, and John Finney McDonnell, born March 18, 1938. Mary McDonnell died on July 6, 1949. He married Priscilla Brush Forney on April 1, 1956, and adopted her three children from a previous marriage.
McDonnell died of a stroke on August 22, 1980. He was buried in Bellefontaine Cemetery in St. Louis.
McDonnell founded the James S. McDonnell Foundation in 1950, which supports scientific, educational, and charitable causes on a local, national, and international level. The McDonnell Center for the Space Sciences is named after him, which he co-founded - established in 1974.
McDonnell Park in St. Louis County is named in honor of James Smith McDonnell, as are the McDonnell Planetarium of the Saint Louis Science Center in Forest Park, the James S. McDonnell classroom and laboratory building at Princeton University, the James S McDonnell Hall at Washington University in St Louis, and James S. McDonnell Boulevard near Lambert-St. Louis International Airport.
The Arkansas Aviation Historical Society selected McDonnell in 1980 as one of five initial inductees in the Arkansas Aviation Hall of Fame.