Born at Knowsley into a family with great power and influence in Lancashire, James Stanley succeeded as 7th Earl of Derby and hereditary Lord of the Isle of Man on the death of his father in September 1642.
As Lord Strange, he raised troops in Lancashire to fight in the Bishops' Wars 1639-40 and became involved in some of the earliest fighting of the Civil Wars when he attempted to prevent the implementation of Parliament's Militia Ordinance at Manchester in July 1642. He was unable to hold on to Manchester for the King. During the spring of 1643, his badly-disciplined troops sacked and burned Lancaster and plundered Preston. They were driven back from Bolton, however, and were decisively beaten at Whalley Abbey by Colonel Ashton in April 1643. Derby retired to the Isle of Man, leaving his French-born wife Charlotte de la Trémouille, the Countess of Derby, to defend the Stanley family seat at Lathom House, which was besieged during the spring of 1644. Derby came to her rescue when he joined Prince Rupert on the York March during which he took part in the sack of Bolton. After the Royalist defeat at Marston Moor, Derby returned to the Isle of Man with the Countess and remained there for the duration of the First and Second Civil Wars.
In 1651, Derby was one of the few Royalists to respond to Charles II's call-to-arms on his march south from Scotland. He raised a force in Lancashire but was defeated at Wigan by Colonel Robert Lilburne. After the battle of Worcester, Derby was arrested and tried by court martial accused of assisting the declared traitor Charles Stuart to invade England. His participation in the sack of Bolton and other Lancashire towns during the First Civil War had not been forgotten; he was beheaded on 15 October 1651 in Bolton market-place.