The Canadian filmmaker, who announced that he will shoot all three instalments in New Zealand, said that he will expand Jake's story in the upcoming movies.
"We spread it around quite a bit more as we go forward. It's really the story of his family, the family that he creates on Pandora," he said.
Sam Worthington and Zoe Saldana are expected to reprise their roles as Jake and Neytiri for the other films, which is scheduled to start shooting in October 2014.
James, a keen deep sea diver, also revealed that his underwater expeditions might play a role in Avatar 2, 3 and 4 as they explore the rest of Pandora.
"There's a fair bit of underwater stuff. It's been inaccurately said that the second film takes place underwater. That's not true," he said.
"There are underwater scenes and surface-water scenes having to do with indigenous ocean cultures that are distributed across the three films. I mean the Pandora that we have imagined will be a fantasy land that is going to occupy people for decades to come."
The next Avatar film is scheduled to be released in December 2016, with the other two to follow in coming years.