Jesse Woodson James was born on September 5, 1847, in Clay County, Missouri, near the site of present-day Kearney. This area of Missouri was largely settled by people from the Upper South, especially Kentucky and Tennessee, and became known as "Little Dixie" for this reason.

His father, Robert S. James, farmed commercial hemp in Kentucky and was a Baptist minister before coming to Missouri. After he married, he migrated to Bradford, Missouri and helped found William Jewell College in Liberty, Missouri.

Jesse earned his nickname when he accidentally shot off the tip of his left middle finger while cleaning a pistol. He reportedly yelled "That's the dod-dingus pistol I ever saw!" And from then on, his friends called him "Dingus".

James and his family maintained strong Southern sympathies during the American Civil War. In 1864, Jesse and his brother Frank joined "Bloody Bill" Anderson, the leader of a group of bushwhackers. They had a reputation of cruel and brutal treatment of Union soldiers, and Jesse was identified as one of the members who took part in the Centralia Massacre that left 22 unarmed Union soldiers dead or injured. In fact, some historians have suggested that James never stopped fighting the Civil War and that his criminal career could be characterized as a regional insurgency of ex-Confederates, rather than a manifestation of frontier lawlessness.

At the age of 17, Jesse suffered the second of two life-threatening chest wounds when he was shot while trying to surrender after running into a Union cavalry patrol near Lexington, Missouri. Jesse recovered from his wound at his uncle's boardinghouse in Harlem, Missouri. He was tended to by his first cousin, Zerelda "Zee" Mimms, named after Jesse's mother. Jesse and Zee married on April 24, 1874. They had two children who survived to adulthood: Jesse Edward James (b. 1875) and Mary Susan James (later Barr, b. 1879).

The James brothers joined with Cole Younger and his brothers John, Jim, and Bob, as well as Clell Miller and other former Confederates, to form what came to be known as the James-Younger Gang. For nearly a decade following the Civil War, they were among the most feared, most publicized, and most wanted confederations of outlaws on the American frontier. The gang's activities included bank, train, and stagecoach robberies in at least eleven states.

Jesse James took great delight in his notoriety and once went so far as to write his own press release and hand it to the engineer of the train he was robbing before riding away with his men. This press release, entitled "A true account of this present affair", stated: "The most daring robbery on record. The southbound train on the Iron Mountain Railroad was stopped here this evening by five heavily armed men and robbed of ____ dollars... The robbers were all large men, none of them under six feet tall. They were masked, and started in a southerly direction after they had robbed the train, all mounted on fine-blooded horses. There is a hell of an excitement in this part of the country!"

Jesse James did not become well known until December 7, 1869, when he and Frank robbed the Daviess County Savings Association in Gallatin, Missouri. The robbery netted little money, but Jesse shot and killed the cashier, Captain John Sheets, mistakenly believing him to be Samuel P. Cox, the militia officer who had killed "Bloody Bill" Anderson during the Civil War. James claimed he was taking revenge, and the daring escape he and Frank made through the middle of a posse shortly afterward attracted newspaper coverage for the first time.

On July 21, 1873, they turned to train robbery, derailing a Rock Island Line train west of Adair, Iowa by prying up part of the track as the train rounded a blind curve. They boarded the crashed train wearing white Ku Klux Klan masks and searched the safe that they believed held gold bullion, only to be disappointed by a meager $2,000. They then collected valuables from the passengers, bringing the total up to about $3,000 (about $65,000 by today's standards).

In 1874, the Adams Express Company turned to the Pinkerton National Detective Agency to stop the James-Younger Gang, but thanks to the support of many former Confederate soldiers in Missouri, the gang eluded the Pinkertons. Allan Pinkerton, the agency's founder, took on the case as a personal vendetta and began to work with former Unionists who lived near the James family farm. On the night of January 25, 1875, he staged a raid on the homestead. Detectives threw an incendiary device into the house, which exploded, killing James' younger half-brother Archie and blowing off one of his mother's arms. Afterward, Pinkerton denied that the raid's intent was arson, but a letter was later discovered in which Pinkerton declared his intention to "burn the house down."