James Goodfellow was born in Tranent, Scotland and came to St. John's in 1850 to work as a clerk for the mercantile firm of McBride & Kerr. In 1864 he became a partner in that firm as well as being its manager. The following year the company changed its name to McBride & Co; in 1869 Goodfellow took complete control of the business which henceforth was called Goodfellow & Co. A shareholder in many of the town's local industries, he became a director in 1864 of the Commercial Bank; by 1889 he was its senior director. On 15 March 1858 he had married Rosina Whiteford of St. John's.

In 1887 and 1888 he was President of the General Water Company, which had been formed in 1859 to provide a water service and fire protection for St. John's residents. This Company levied and collected water and sewerage assessments (the only property taxation residents paid) to pay for local services. When the Administration of Premier Robert Thorburn in 1888 established a Municipal Council for St. John's, Goodfellow was one of two government appointees made to Council, the other two members being elected on the basis of a ward system. His experience in managing the Water Company was the reason the government appointed him chairman of the Council, which took control of the Water Company's assets and staff. In May 1890 the new Administration of Liberal Premier William Whiteway, which had won the general election held in November 1889, replaced Goodfellow with a nominee more to its political liking. On 23 January 1892 he re-entered municipal politics as the elected representative for Ward Three on Council. He did not seek re-election in 1896.

Goodfellow suffered extensive financial losses in the failure in December 1894 of the Commercial Bank. The subsequent legal investigation of Newfoundland's banking system placed a heavy strain on his health, thus resulting in his death on 25 January 1898 at St. John's.