James Moody was born partially deaf in Savannah, Georgia, on March 26, 1925, and raised in Newark, New Jersey, by his mother, Ruby Hann Moody Watters. His father, a trumpeter in Tiny Bradshaw's band, was absent from his life. The hearing loss cut off his high frequencies and pushed his ear toward the low register, a bias that stayed audible in his phrasing for sixty years. His uncle Louis bought him his first alto saxophone when he was 16. Moody taught himself by ear off records, taking his earliest cues from Jimmy Dorsey, Charlie Barnet, and Georgie Auld before Lester Young, Buddy Tate, Don Byas, Coleman Hawkins, and the Count Basie reed section pulled him toward the tenor.

He enlisted in the U.S. Army Air Corps in 1943 and was assigned to the segregated band at the Greensboro Training Center, where, as he told the Hamilton College Fillius Jazz Archive in 1998, the recruiters asked only whether the men owned instruments, not whether they could play them; official Air Force musicians were then brought in to teach the Black band. Discharged in 1946, he joined Dizzy Gillespie's bebop big band and stayed roughly two years. Gillespie became the central figure of Moody's professional life and remained so, on and off, for close to half a century. Moody's first sessions as a leader came at Apex Studios in New York on October 19 and 25, 1948, for Blue Note, billed as James Moody and His Modernists: an octet with Dave Burns and Elmon Wright on trumpets, Ernie Henry on alto, Cecil Payne on baritone, and arrangements by Gil Fuller, with Art Blakey taking over the drum chair and Chano Pozo adding congas and vocals on the second date's Afro-Cuban material.

Late in 1948 he left for Europe, telling interviewers he had been scarred by racism at home, and spent about three years based mainly in Paris. On October 12, 1949, on a short club engagement in Stockholm, he recorded the thing he is still best known for. Working with a Swedish pickup group for the Metronome label, he improvised on Jimmy McHugh's 1935 pop song "I'm in the Mood for Love" using a borrowed alto saxophone, an instrument he had not played professionally to that point. Moody's own explanation for the solo's dense, scrambling line was unsentimental: he was hunting for the right keys on a horn he did not know. Metronome later leased the side to the newly founded Prestige label in New York, and the singer Eddie Jefferson set narrative lyrics to Moody's solo note for note, one of the founding acts of vocalese. King Pleasure heard Jefferson perform it, won the Apollo Theater's amateur night with it in November 1951, and cut it for Prestige on February 19, 1952, with Blossom Dearie singing the woman's part and a band led by Teacho Wiltshire. Retitled "Moody's Mood for Love," the record entered Billboard's rhythm and blues retail chart on May 17, 1952, reached number five, and stayed on for sixteen weeks. McHugh sued over the borrowed harmony and won a partial victory, eventually sharing the proceeds with Moody. Moody, who had nothing to do with the hit and was not even in the country when it was made, spent the rest of his career playing and often singing the song, and never seemed to tire of it.

He returned to the United States in 1951 and 1952 and signed with Prestige, leading a working septet whose vocalist was Eddie Jefferson himself: Dave Burns on trumpet, William Shepherd on trombone, Pee Wee Moore on baritone, Jimmy Boyd on piano, John Lathan on bass, and Clarence Johnston on drums, cutting at Rudy Van Gelder's Hackensack studio from January 8, 1954. That band produced Moody (1955), Hi Fi Party (1955), James Moody's Moods (1956), and Wail Moody, Wail (1956), and worked the circuit hard: Moody and his orchestra played the eleventh Cavalcade of Jazz at Wrigley Field in Los Angeles on July 24, 1955, on a bill with Lionel Hampton and Big Jay McNeely. He was still an ear player at this stage. It was touring with the Brook Benton Revue that finally put him in front of music theory, and he credited trombonist and arranger Tom McIntosh with sitting him down and explaining chord changes.

Moving to Chicago's Argo label in 1956 gave Moody a nine-year run and his most varied catalog. Flute 'n the Blues (Argo LP-603, 1956) made a leader's case for the flute at a moment when almost nobody was playing it in a bebop context, and Moody's Mood for Love (Argo LP 613, 1957) finally put the song, sung by Eddie Jefferson, on an album under Moody's own name. His drinking and the mental-health problems that came with it caught up with him in April 1958, when, with his mother's help, he committed himself to Overbrook Asylum in Essex County, New Jersey; he was discharged that September. Two weeks later, in Chicago on September 7, 8, and 10, 1958, he recorded Last Train from Overbrook (Argo LP 637), a big-band date arranged by Johnny Pate with Junior Mance and Pat Patrick in the ranks, naming the record after the place he had just left. It remains the most direct statement he ever made on a record sleeve.

Moody rejoined Gillespie in the early 1960s and stayed until around 1970, working in the quintet alongside pianist Kenny Barron and guitarist Les Spann, both of whom kept turning up on his records for decades afterward. He recorded a string of his own dates through the period, including Another Bag (1962), Great Day (1963), and Running the Gamut (1964, with Thad Jones), then two ambitious Orrin Keepnews and Dick Katz productions for Milestone arranged by Tom McIntosh: Moody and the Brass Figures (recorded October 1966) with Mel Lewis and Jimmy Owens, and The Blues and Other Colors (1968 to 1969), which set his flute against strings, oboe, French horn, and a wordless vocal. He also cut a Prestige quartet date, Don't Look Away Now! (1969), with Barry Harris and Eddie Jefferson. From the mid-1970s into the early 1980s he took steady, well-paid work in Las Vegas show bands, backing touring headliners rather than leading a jazz group, a stretch he later described without apology as the period that paid his bills.

The comeback came through two channels. He joined the Gene Harris-led Philip Morris Superband, which opened a four-country, 18-concert tour in Perth, Australia, on September 3, 1986, and kept touring worldwide into the early 1990s alongside Jimmy Smith, Kenny Burrell, Jimmy Heath, Slide Hampton, and Jon Faddis. And he signed with RCA's Novus imprint for a run of well-made small-group records produced in part by Tom McIntosh: Something Special (1986) with Kirk Lightsey and Idris Muhammad, Moving Forward (1988) with Kenny Barron, Sweet and Lovely (1989) with Dizzy Gillespie guesting on trumpet and vocals, and Honey (1991). Moody settled in San Diego in 1989, the year he married Linda Petersen McGowan, and took up the Baha'i Faith after Gillespie's death in 1993. In 1997 he played William Glover, a law-firm porter who walks an invisible dog named Patrick, in Clint Eastwood's film of Midnight in the Garden of Good and Evil, shot in his birth city of Savannah. The National Endowment for the Arts named him an NEA Jazz Master in 1998.

His last two decades were busy. The James Moody Quartet, with pianist Renee Rosnes, bassist Todd Coolman, and drummer Adam Nussbaum, became his regular working group; he toured constantly with the Dizzy Gillespie Alumni All-Stars and the Dizzy Gillespie All-Star Big Band, worked with Jon Faddis and the WDR Big Band in Cologne in 2007, and cut Young at Heart (1996), Moody Plays Mancini (1997), Homage (recorded May 2003, released 2004), and Our Delight (2008) with Hank Jones. In 2005 he and his wife endowed the Moody Scholarship Fund at the Conservatory of Music at Purchase College, SUNY. On July 21 and 22, 2008, at Avatar Studios in New York, he recorded two albums' worth of quartet material with Barron, Coolman, and Lewis Nash, issued as Moody 4A (2009) and Moody 4B (2010). His wife announced on November 2, 2010, that he had pancreatic cancer and had chosen not to treat it aggressively; he passed away in San Diego on December 9, 2010, at 85. Two months later, at the 53rd Grammy Awards in February 2011, Moody 4B won Best Jazz Instrumental Album, Individual or Group, the first Grammy win of a career that had produced more than fifty records under his own name. The New Jersey Performing Arts Center in Newark named its annual jazz festival for him.

Moody was a bebop tenor player who spent his life refusing to specialize. He added alto to his working horns almost by accident on the 1949 Stockholm date, took up the flute at a point when the instrument had no real bebop vocabulary and built one for it across Flute 'n the Blues and the Milestone albums, and picked up soprano saxophone in the late 1960s. The partial deafness he was born with shaped the result: he favored the horn's low end and a broad, slightly hoarse tone rather than the bright upper-register attack most of his bebop contemporaries chased. What set him apart from the other Gillespie graduates was a willingness to be funny on the bandstand, singing "Moody's Mood for Love" in a light, unpolished voice and clowning between choruses without cheapening the playing that followed. Ira Gitler, who wrote liner notes for him across four decades from the Prestige years to Moody 4A, was among the critics who tracked that combination of humor and seriousness most closely. His most durable influence is indirect and enormous: one improvised alto chorus, transcribed and given words by Eddie Jefferson, turned into a jazz standard later recorded by King Pleasure, Aretha Franklin, George Benson, Van Morrison, and, in a star-loaded 1995 version on Q's Jook Joint that Moody sang on himself, Quincy Jones.