Webb was born in Claverack, New York to Catherine (Hogeboom) and Gen. Samuel Blachley Webb, a Revolutionary officer of distinction. At age 12 he moved to Cooperstown, New York to live with his brother-in-law and guardian, Judge George Morrill. He entered the United States Army in August 1819, advanced to the grade of first lieutenant in 1823, and in the following year became assistant commissary of subsistence.
In September 1820, a party led by Lewis Cass, governor of the Michigan Territory, on its return from the exploration of the source waters of the Mississippi River, encountered Lt. Webb and a small group of soldiers at the mouth of the Black River in what is now Port Huron, Michigan. H.R. Schoolcraft, historian of the trip, said Webb and his men were returning to Fort Gratiot, a frontier outpost, with a boat full of freshly harvested watermelon.
In the fall of 1827 he resigned from the army to become a newspaper publisher, purchasing the Morning Courier which he published in the interest of General Jackson. In 1829 he purchased the New York Enquirer, which he consolidated with the Courier under the title of the New York Courier and Enquirer. He remained connected with this paper for more than 30 years. Historian Don C. Seitz wrote of those days:
James Watson Webb, of the horrendous Courier and Enquirer, who was a good deal of what was known in that day as a 'lady-killer' and Beau Brummel, sneered editorially, for example, at Greeley's ill-worn clothes. Just before indulging in this persiflage, Webb had been indicted, convicted and sentenced for acting as a second to Henry Clay in a duel with Tom Marshall. The term of duress was two years in Sing Sing, but Governor William H. Seward pardoned him before he went behind bars, in return for which Webb named one of his sons "William Seward Webb".
In 1834, Webb used the Courier and Enquirer to coin the name of a new political party: the Whigs. Webb had formerly been a supporter of Jackson, but no longer. That same year he recycled or invented extravagant rumors of miscegenation, that the abolitionists had counselled their daughters to marry blacks, and Lewis Tappan had divorced his wife to marry a black woman, and that the Presbyterian minister Henry Ludlow was conducting interracial marriages, which fueled the organized mob violence of New York's anti-abolitionist riots that June.
In 1849, he was appointed minister to Austria, but the appointment was not confirmed. That same year he married Laura Virginia Cram (on November 9, 1849). In 1851 he was appointed engineer-in-chief for the State of New York with the rank of Brigadier General, but refused to accept the appointment. In 1861, he was appointed minister to Turkey, but even though it had been confirmed by the United States Senate, he declined. As Glyndon Van Deusen wrote: "Webb, an inveterate beggar for office, wanted a diplomatic appointment that would be lucrative."
Shortly afterwards he was appointed minister to Brazil and served in that position for eight years. At Paris in 1864, he negotiated a secret treaty with the Emperor Napoleon III for the removal of French troops from Mexico.
"In Paris and Rio de Janeiro, on land or sea", wrote Abraham Lincoln's biographer, Carl Sandburg, Webb "believed that Lincoln should have appointed him major general, rating himself a grand strategist, having fought white men in duels and red men in frontier war."
Webb published the following:Altowan, or Incidents of Life and Adventure in the Rocky Mountains (1846)
Slavery and its Tendencies (1856)
National Currency, a pamphlet (1875)
In 1869 he resigned the mission to Brazil, and returned to live in New York. Webb died in 1884 and was buried at Woodlawn Cemetery, The Bronx.
Two sons, H. Walter Webb and William Seward Webb, were noteworthy railway executives. Another son, Alexander Stewart Webb, was a noted Civil War general.