Saint James Episcopal Church was founded as the result of royal generosity. King George II of England gave 20 pounds to the Reverend Richard Locke to help finance his transportation to the New World as a missionary. This same clergyman, when traveling through Lancaster, gathered the members of the Church of England together for divine service in the courthouse, in what is now known as Penn Square. He agreed to remain in the community as their rector. On 3 October 1744, "to keep and maintain ye policy of government of ye Church," these people met for selecting churchwardens and vestry.

Shortly afterward contributions were collected toward the cost of the building, and from 1746 to 1753 the first structure of gray stone was slowly built on land given by James Hamilton, Esq., the "Father of Lancaster." On this same site the present church building was erected in 1820.Our beautiful buildings help create a sacred place to worship. As you sit in a pew, you can imagine the people who have worshipped here for more than 250 years. The parishioners throughout the ages have always made a real commitment to the city, the education of young people, to helping others, and to preserving and improving their beautiful buildings. The warmth and charm of Saint James provide a framework for spiritual growth, fellowship, and the caring for others. Saint James is a "grand place where one can feel humble" It is surrounded by its picturesque churchyard, shaded with beautiful trees, with ancient tombstones marking the graves of many of Lancaster's early inhabitants and parishioners who played key roles in the formation of our country. Today, the churchyard includes areas for quiet reflection and a memorial garden.