Kelman says :

My own background is as normal or abnormal as anyone else's. Born and bred in Govan and Drumchapel, inner city tenement to the housing scheme homeland on the outer reaches of the city. Four brothers, my mother a full time parent, my father in the picture framemaking and gilding trade, trying to operate a one man business and I left school at 15 etc. etc.

(...)

For one reason or another, by the age of 21/22 I decided to write stories. The stories I wanted to write would derive from my own background, my own socio-cultural experience. I wanted to write as one of my own people, I wanted to write and remain a member of my own community.

During the 1970s he published a first collection of short stories. He became involved in Philip Hobsbaum's creative writing group in Glasgow along with Tom Leonard, Alasdair Gray and Liz Lochhead, and his short stories began to appear in magazines. These stories introduced a distinctive style, expressing first person internal monologues in a pared-down prose utilising Glaswegian speech patterns, though avoiding for the most part the quasi-phonetic rendition of Tom Leonard. Kelman's developing style has been influential on the succeeding generation of Scottish novelists, including Irvine Welsh, Alan Warner and Janice Galloway. In 1998, Kelman received the Stakis Prize for "Scottish Writer of the Year" for his collection of short stories 'The Good Times.'

Kelman's work has been described as flowing "not only from being an engaged writer, but a cultural and political activist". At the time of Glasgow's Year as City of Culture he was prominent in the Workers' City group, critical of the celebrations. The name was chosen as to draw attention to the renaming of part of the city centre as the Merchant City, which they described as promoting the "fallacy that Glasgow somehow exists because of (...) 18th century entrepreneurs and far-sighted politicians. (The merchants) were men who trafficked in degradation, causing untold misery, death and starvation to thousands" The Workers' City group campaigned against what was seen as the victimisation of People's Palace curator Elspeth King and a Council attempt to sell off one third of Glasgow Green. Their activities drew the ire of Labour Party councillors and commentators, Kelman, and his colleagues Hugh Savage and Farquhar McLay, being described as "an 'embarrassment' to the city's 'cultural workforce'".

Kelman has been a prominent campaigner, notably in issues of social justice and traditional left wing causes, although he is resolutely not a party man, and remains at his heart a libertarian socialist anarchist, saying "the parliamentary opposition parties are essential to the political apparatus of this country which is designed to arrest justice". He lives in Glasgow with his wife and children, though has also lived in London, Manchester, the Channel Islands, Australia and America.

In his introduction to Born up a Close: memoirs of a Brigton boy (2006), an edition of Glaswegian political campaigner Hugh Savage's writings, Kelman sums up his understanding of the history of national and class conflict as follows:

In an occupied country indigenous history can only be radical. It is a class issue. The intellectual life of working class people is ‘occupied’. In a colonised country intellectual occupation takes place throughout society. The closer to the ruling class we get the less difference there exists in language and culture, until finally we find that questions fundamental to society at its widest level are settled by members of the same closely knit circle, occasionally even the same family or ‘bloodline’. And the outcome of that can be war, the slaughter of working class people.

Short stories

• An Old Pub Near The Angel (1973)
• Not Not While The Giro (1983)
• Lean Tales (1985) (joint volume with Alasdair Gray and Agnes Owens)
• Greyhound For Breakfast (1987) (winner of the Cheltenham Prize for Literature)
• The Burn (1991)
• Busted Scotch (1997)
• The Good Times (1998)
• If It Is Your Life (2010)

Novels

• The Busconductor Hines (1984)
• A Chancer (1985)
• A Disaffection (1989)
• How late it was, how late (1994) (winner of the Booker Prize)
• Translated Accounts (2001)
• You Have To Be Careful In The Land Of The Free (2004)
• Kieron Smith, boy (2008)

Essays

• And The Judges Said (2002)

Edited

• An East End Anthology, ed. Jim Kelman (1988)
• Hugh Savage, Born up a Close: memoirs of a Brigton boy, ed. James Kelman (2006)

Book-length Critical Works on Kelman

• Dietmar Böhnke. Kelman Writes Back (1999)
• H. Gustav Klaus. James Kelman: Writers and their Work (2004)
• J.D. Macarthur. Claiming Your Portion of Space': A study of the short stories of James Kelman (2007)
• Simon Kovesi, James Kelman (Manchester University Press, 2007)