James Lagoon is a drowned cirque basin about 0.5 miles (0.8 km) wide and partially enclosed by the remains of a terminal moraine, situated on the western shore of McCarty Fjord in Kenai Fjords National Park, about 51 miles (82 km) southwest of Seward and 40 miles (64 km) east-southeast of Homer, Alaska. The lagoon was named by Ulysses S. Grant and Daniel F. Higgins of the U.S. Geological Survey for Captain James J. Bettles, a resident of Valdez, Alaska, who assisted in the mineral surveys conducted in Southcentral Alaska in 1909. The terminus of the McCarty Glacier at that time was adjacent to the lagoon. The estuary is fed by two glacial streams. The eastern stream starts from the terminus of an unnamed glacier at an elevation of about 1300 feet (396 m) and flows generally south for 3 miles (4.8 km) to the lagoon. The eastern glacier starts from an elevation of about 3300 feet (1,006 m) in the Kenai Mountains and flows south-southwest for 2.5 miles (4 km). The western stream starts from another small unnamed glacier at an elevation for about 1,350 feet (412 m) and flow generally southeast for 3 miles (4.8 km) to the lagoon. The western glacier starts from an elevation of 4,000 feet (1,220 m) and flows south-southwest for 3.7 miles (5.9 km). The Kenai Mountains in this vicinity belong to the Southern Margin composite terrane, and the rocks represent the Valdez Group that developed during the Late Cretaceous and consist primarily of complexly deformed metasedimentary greywacke, siltstone, and shale generally considered to be deposits of turbidity currents in an oceanic trench.

Glaciers are a major influence on the present-day morphology of the southern Kenai Peninsula. Glaciers and ice fields covered the peninsula during the Last Glacial Period and likely extended out to the edge of the continental shelf, about 138 miles (220 km) offshore from the present-day coastline. Glaciers retreated from about 11,000 to 6,00 years ago during the Early and Middle Holocene, then expanded during the Neoglacial period, about 4,000 to 1,100 years ago, and retreated again between 1,100 and 700 years ago. During the Little Ice Age, which in Alaska lasted from about 1250 to 1900, glaciers again rapidly advanced seaward in the Kenai Fjords region, driven by snow accumulation in the higher elevations of the Harding Icefield. McCarty Fjord is now a waterway 22 miles (35 km) long and between 1 (1.6 km) and 2 miles (3.2 km) wide, deeply scoured and partially enclosed by a terminal-moraine shoal that spans the fjord between James Lagoon to the west and McCarty Lagoon to the east. The fjord was formerly filled by McCarty Glacier, which began a drastic retreat shortly after 1909. The glacier reached shallow water at the head of the fjord around 1960. In 1964, the Great Alaska Earthquake resulted in subsidence of 0.3 to 0.7 feet (1.0 to 2.5 m) of subsidence along the Kenai Fjords coastline. Due to numerous landslides, widespread flooding and salt water incursion into previously forested areas, ‘ghost forests’ of dead standing trees now occupy low-lying areas such as James Lagoon.

The outer coast of the Kenai Penisula is the traditional territory of the Unegkurmiut, a distinct group of the Chugach Alutiiq. The first European contact with the Unegkurmiut occurred sometime in the late 1780s by Russian fur traders. In the 1830s, a trading post and Russian Orthodox chapel were established at Yalik village, near the entrance to McCarty Fjord. From its formation in the late 18th century, the Russian-American Company discouraged Russians from settling in Alaska, but permitted their employees to have children with Alaska Natives. The rapid growth of a mixed-heritage, or Creole population, from some 200 people in 1818 to nearly 2,000 in 1863 was favorable to the Russians who were struggling to recruit company workers. When Alaska was purchased by the United States in 1867, Creoles represented the majority of the skilled workforce in service to the Russian-American Company, and most had been moved by the Russian Orthodox Church from the outer coast to the present-day villages of Nanwalek and Port Graham. Prospectors established several claims in the area near the entrance to McCarty Fjord and a homestead was developed on nearby Nuka Island. Between 1920 and 1925, McCarty Glacier had retreated to expose Delight Lake on the eastern shore, and between 1935 and 1940, Desire Lake emerged to the north. In 1949, the first sockeye salmon were commercially caught in this area and sold. King crabs were caught in the 1960s, and Dungeness crabs were caught in James Lagoon where crab pots also were stored. Topographic maps from the 1950s show a cabin in James Lagoon, but nothing remains of the structure, and it may have been a casualty of the 1964 earthquake. Read more here and here. Explore more of James Lagoon and McCarty Fjord here: