Born in London in 1972 as one of three children from Rupert's second marriage to Anna, James Murdoch had an unusual start to his career. At Harvard University he drew cartoons for the satirical magazine Lampoon and also set up a hip-hop record label, Rawkus, in the mid-1990s.
The company was making a small profit when it was bought by News Corporation and James returned to the family business as head of the firm's music division. He ventured into the burgeoning dotcom market, investing in a series of internet ventures, and is credited by some for piquing Murdoch senior's interest in cyberspace. But like many other dotcom investors, James met with indifferent results and News Corporation's foray into the market was short-lived.
James's mixed early performance did not dent his father's confidence in his abilities and in 2000 he was appointed chairman and chief executive officer of News Corporation subsidiary Star TV.
Star moved into profit after building a strong presence in India and won "landing rights" in mainland China. Cries of nepotism greeted his appointment in November 2003 as chief executive of BSkyB - the youngest head of a FTSE 100 company.
In December 2007 he was handed the task of leading his father's media empire in Europe and Asia with direct responsibility for the strategic and operational development of News Corporation's television, newspaper and related digital assets there and in the Middle East. Four years later he took on the newly-created post of deputy chief operating officer of News Corporation - the third most senior figure in the organisation.
Below is the timeline of the crisis which engulfed his career.
2007
January 26 - The News of the World's royal editor Clive Goodman is jailed for four months and private investigator Glenn Mulcaire receives a six-month sentence after they admit intercepting voicemail messages on royal aides' phones. The paper's editor Andy Coulson resigns in the wake of the convictions, saying he "deeply regrets" what happened and takes "ultimate responsibility" for it.
2009
July 9 - The Guardian reports that the News of the World's publisher has paid more than £1 million to settle cases that threatened to reveal evidence of its journalists' alleged involvement in phone hacking.
July 21 - Coulson tells MPs on the Culture, Media and Sport Committee that things went "badly wrong" under his editorship of the News of the World, but insists he knew nothing about alleged phone hacking.
2010
February 24 - A Culture, Media and Sport Committee report finds no evidence that Coulson knew phone hacking was taking place at the News of the World, but says it is "inconceivable" that no-one apart from Goodman was aware of it.
May 11 - Coulson becomes head of the new coalition Government's media operation after David Cameron enters 10 Downing Street as Prime Minister.
September 5 - The New York Times publishes a long article which claims government Coulson knew his staff were carrying out illegal phone hacking. The story also raises questions about how vigorously Scotland Yard pursued the case.
Above: March 2010 file photo of James Murdoch, left, and Rupert Murdoch, right, during day four of the 2010 Cheltenham Festival
2011
January 21 - Coulson announces he is standing down as Downing Street communications chief.
January 26 - Scotland Yard launches a fresh inquiry into the phone hacking controversy, called Operation Weeting, after receiving "significant new information" from News International, which publishes the News of the World.
April 8 - News International admits liability and apologises "unreservedly" to a number of public figures whose phones were hacked.
July 4 - The Guardian reports that the News of the World hacked the mobile phone of murdered schoolgirl Milly Dowler after she went missing in 2002.
July 6 - Cameron announces a public inquiry into the scandal. Rupert Murdoch describes the phone hacking allegations as "deplorable and unacceptable" but backs Rebekah Brooks to continue as News International chief executive.
July 7 - News International chairman James Murdoch announces he is closing the News of the World.
July 8 - Coulson is arrested on suspicion of phone hacking and corruption and held for questioning before being released on bail.
July 10 - The News of the World ends its 168-year history with a final edition whose front page headline reads: "Thank you and goodbye".
July 13 - Murdoch's News Corporation withdraws its bid to take over satellite broadcaster BSkyB.
July 15 - Brooks resigns as chief executive of News International.
July 17 - Brooks is arrested on suspicion of phone hacking and corruption before being bailed.
July 28 - Police tell Sara Payne, whose eight-year-old daughter Sarah was murdered in 2000, that her phone may have been hacked by the News of the World.
September 6 - The News of the World's former editor Colin Myler and ex-legal manager Tom Crone tell the Culture, Media and Sport Committee they informed James Murdoch in 2008 about an email that proved hacking went beyond a single "rogue reporter" on the News of the World. Murdoch denies their claim.
October 21 - Rupert Murdoch deflects attempts by investors to remove him as chairman of News Corporation at the company's annual meeting. He also retains his sons James and Lachlan as directors.
November 14 - The Leveson Inquiry, sitting at the Royal Courts of Justice in London, starts hearing evidence about the culture, practice and ethics of the British press.
Above: In July the Murdochs gave evidence to the Culture, Media and Sport Select Committee
2012
January 19 - The High Court hears that dozens of celebrities and politicians, including Jude Law and Lord Prescott, have now settled damages claims over the News of the World phone hacking scandal.
January 28 - Four former and current Sun journalists and a serving Metropolitan Police officer are arrested over alleged illegal police payments. Senior Sun employees Chris Pharo, 42, and Mike Sullivan, along with former executives Fergus Shanahan, 57, and Graham Dudman, are detained by officers from Operation Elveden. They are later bailed.
February 11 - Eight people, including five further employees from The Sun, are arrested in connection with the probe into inappropriate payments to police and public officials, and later bailed. In a memo to staff, News International chief executive Tom Mockridge says he has had a personal reassurance from Rupert Murdoch of his "total commitment" to continue to own and publish The Sun.
February 15 - Reuters reports that a source has said the investigation into alleged corrupt payments by Sun journalists involves "suspected criminality over a sustained period of time" involving tens of thousands of pounds.
February 17 - Rupert Murdoch declares his "unwavering support" for The Sun's journalists and announces he is lifting the suspensions of all arrested staff.
February 19 - News International announces The Sun will be published on a Sunday for the first time on February 26. An internal email to all staff from Tom Mockridge, News International's chief executive, acknowledges the parent company's previous wrongdoing and said it was "fundamentally changing".
February 26 - News International publishes the first Sunday edition of The Sun.
February 29 - It is announced that James Murdoch is to step down as executive chairman of News International.
April 3 - James Murdoch stepped down as chairman of satellite broadcaster BSkyB.