His time of 43.94 was the fastest seen in Britain, removing the all-comers' best of world record-holder Michael Johnson, and putting him in an elite club.
Only 10 men have ever broken 44 seconds, and there appears much more to come from the elegant, relaxed James who added this to World gold he won in Daegu, Korea last year.
He was one of three teenagers in the final. World junior champion Luguelin Santos took silver for the Dominican Republic 45 minutes after Felix Sanchez had won an emotional gold in the men's 400m hurdles. Lalonde Gordon of Trinidad took bronze in 44.52.
The US, who swept the podium in Beijing and Seoul, were out of the medals for the first time since they boycotted Moscow. Otherwise their last Games without a medal in the event was in 1920.
Sanchez won hurdles gold with the name of his late grandmother, Lillian, on his spikes. She died during the 2008 Beijing Olympics.
"I just wanted to make her proud, so I've got her name on my spikes. The day she died in Beijing it broke my heart," he said.
Last night he regained the title he won in 2004 with her picture under his name, next to his heart. His time of 47.63, evoked memories of the man who once dominated this event, winning 43 consecutive races. This matched his winning performance from eight years ago, as he held off fast-finishing Michael Tinsley (47.91) and world championships silver medallist Javier Culson, the world No.1, who took bronze in 48.10. Even the roars of the crowd could not lift Dai Greene into the medals. The Welshman was fourth, in 48.24, after a stumbling start that included demolishing the second hurdle. Angelo Taylor's defence ended as he slipped from first coming off the bend to fifth in 48.25.
Sanchez joins Taylor and Edwin Moses as third man to regain this title. His return comes after years of injuries. His last major medal was five years ago and he was eliminated in the heats in Beijing 2008.
As he celebrated his victory, he pulled his grandmother's photo from under his vest, placed it on the track and kissed it. On the podium, he was overcome with emotion. There was loud applause from the crowd as he wept into his hands.
Lawrence Okoye is 6ft 6in and 20 stone. He must have presented an intimidating sight as an academy winger with Wasps and London Irish. But he gave up rugby two years ago, and is now in the Olympic discus final.
His first throw, a foul, almost knee-capped a photographer. Coach John Hillier held his head in his hands, and his second was still well short of qualifying. But Okoye then launched the two-kilo weight 65.28m to qualify fourth best for tomorrow night's final.
Estonia's defending champion, Gerd Kanter, led the qualifiers with 66.39m.
Andrew Osagie was the only UK survivor from the opening round of the 800m. He did well to take third, final qualifying place in his heat, by three hundredths of a second in 1min 46.42sec. His rivals included the 6ft 3in Masai, world record-holder David Rudisha and defending silver medallist Ahmed Ismail. The Kenyan won in 1:45.90, but Sudan's Ismail went out in sixth.
"I'm renowned for being rubbish in the morning," said Essex-born Osagie, "so to get automatic qualifying means I can relax, and come back tomorrow and run well."
Team-mates Gareth Warburton (1:46.97) and Michael Rimmer (1:49.05), failed to advance.