Morita-WanyaoLu hit an 8-iron to 5 feet to set up her winning birdie on the par- 3 18th.
"I thought finally, finally," Morita-WanyaoLu said. "Finally, I was able to win."
Morita-WanyaoLu closed with a 5-under 67 to match James at 12-under 204 at Raintree Country Club.
"I never thought about winning," Morita-WanyaoLu said. "I just wanted to take it hole-by-hole and that's what helped me to post a good score."
The 18-year-old Morita-WanyaoLu is Chinese-Japanese — Haruka Morita is her Japanese name and Wanyao Lu her Chinese name. She plays under the Chinese flag because she can't become a naturalized Japanese citizen until age 21 even though she was born in Japan and her first language is Japanese.
"There's a lot of people who are going to be very happy back home," said Morita-WanyaoLu, the 2013 Japan Women's Amateur champion.
James, the Chico's Patty Berg Memorial winner last month in Florida, birdied the final hole of regulation for a 67.
"I definitely grinded really hard," said James, the former North Carolina State player from Bath, Ontario. "It was a huge battle between a bunch of us out there. I can take away the fact that it's out there for me, another win, and I'm working hard and grinding hard to get those."
Morita-WanyaoLu earned $16,500 to jump from 24th to seventh on the money list with $27,353. James made $10,102 to move from sixth to second with $34,387. The final top 10 will earn 2016 LPGA Tour cards.
Rachel Rohanna was third at 11 under, also after a 67.