James Bennet was born in Boston, Massachusetts to Susanne Bennet née Klejman (of Polish-Jewish descent) and Douglas J. Bennet. He has a brother and sister. When his father went to work on the staff of Thomas F. Eagleton, the family moved to Washington, DC. There James attended the St. Albans School. He studied at Yale University, where he earned a Bachelor of Arts degree.

Susanne Bennet taught English as a second language at Language ETC, a non-profit organization in Washington. Douglas Bennet was appointed as a political official in the Carter and Clinton administrations, served as the president of National Public Radio from 1983 to 1992 and as the president of Wesleyan University from 1995 to 2007.

Bennet's older brother Michael is the junior United States Senator from Colorado.

Bennet began his journalism career as an intern for The News & Observer, and later, The New Republic. From 1989 to 1991, he held an editing post at The Washington Monthly. He joined The New York Times in 1991. He rose to serve as a White House correspondent and the Jerusalem bureau chief for the paper. Upon his return from Jerusalem, he wrote a memorandum on the proper usage of the terms "terrorist" and "terrorism", which is often cited by editors of The Times.

Bennet was due to become the Timess Beijing correspondent in late 2006. He resigned from the paper in March of that year to accept an offer to become the 14th editor-in-chief of The Atlantic. Bennet was selected by the magazine's publisher, David G. Bradley, following an exhaustive selection process. Bradley conferred with 80 journalists around the United States.

Bennet as editor attracted attention in April 2008 when the magazine featured a cover story on Britney Spears, a change from The Atlantic's tradition in higher culture. The issue did poorly in newsstand sales.