James suffered an apparent knee injury in the fourth quarter of last week's 20-6 win over Kansas, and coach Gary Patterson had told reporters this week he believed James would be a game-time decision for Saturday's game against Virginia.
James' injury, about which TCU would not provide specifics, will keep him off the field for the rest of TCU's first season in the Big 12.
The junior led TCU with 875 yards in 2011, and was the team's leading rusher with 168 yards through two games this season.
Since James will have played in fewer than 30 percent of his team's games in 2012, he would be eligible to apply for a medical redshirt, and resume playing in 2013 with two years of eligibility remaining.
Running back Ed Wesley, one of three running backs to top 700 yards in 2011, left TCU before the season began.
Matthew Tucker will take over the lead running back role for the Frogs. Tucker has 100 yards on 19 carries for TCU and had 702 yards in 2011. He led the team with 12 touchdowns.
Senior Aundre Dean, a UCLA transfer, will join true freshman B.J. Catalon in filling James' void. Catalon has 61 yards rushing and 57 yards receiving through two games. Dean has 29 yards on eight carries.