McAuley was born in Lakemba, a suburb of Sydney. He was educated at Fort Street High School and then attended Sydney University, where he majored in English, Latin and philosophy. In 1937 he edited Hermes, the annual literary journal of the University of Sydney Union, in which many of his early poems were published until 1941. He began his life as an Anglican and was sometime organist and choirmaster at Holy Trinity Church, Dulwich Hill, in Sydney. He lost his Christian faith as a younger man. In 1943 McAuley was commissioned as a lieutenant in the militia for the Australian Army and served in Melbourne and Canberra. After the war he also spent time in New Guinea, which he regarded as his second "spiritual home". McAuley came to prominence in the wake of the 1943–44 Ern Malley hoax. With fellow poet Harold Stewart, McAuley concocted sixteen nonsense poems in a pseudo-experimental modernist style. These were then sent to the young editor of the literary magazine Angry Penguins, Max Harris. The poems were raced to publication by Harris and Australia's most celebrated literary hoax was set in motion. Peter Coleman considered that "no one else in Australian letters has so effectively exposed or ridiculed modernist verse, leftie politics and mindless liberalism". In 1952 he converted to Roman Catholicism, the faith his own father had abandoned, following an intense spiritual experience at a Catholic mission in New Guinea This was in the parish of St Charles at Ryde. He was later introduced to Australian musician Richard Connolly by a priest, Ted Kennedy, at the Holy Spirit parish at North Ryde and the two subsequently collaborated to produce between them the most significant collection of Australian Catholic hymnody to date, titled "Hymns for the Year of Grace". Connolly was McAuley's sponsor for his confirmation into the Roman Catholic Church. McAuley had been influenced during his undergraduate years by communism, anarchism and the freethinking philosophy of Professor John Anderson. However, he remained staunchly anti-communist throughout his later life. In 1956 he and Richard Krygier founded the literary and cultural journal, Quadrant and was chief editor until 1963. From 1961 he was professor of English at the University of Tasmania. A portrait of McAuley by Jack Carington Smith won the 1963 Archibald prize. James McAuley died of cancer in 1976, at the age of 59, in Hobart.
