The 51-year-old actor, best known for playing Tony Soprano on `The Sopranos`, reportedly suffered a massive heart attack.
The media-shy star, who has a nine-month-old daughter with his wife of almost five years Deborah Lin, as well as a teenage son, Michael, with his ex-wife, Marcy Wudarski, was in Italy to attend the 59th Taormina Film Festival in Sicily, which he was due to participate in this weekend with Italian director Gabriele Muccino.
A source close to the actor told the New York Daily News: "Everyone is in tears."
The three-time Emmy Award winner first found fame in 1992 when he landed a role in a Broadway version of `A Streetcar Named Desire` alongside Alec Baldwin and Jessica Lange.
Shortly afterwards he played a hitman in the 1993 movie `True Romance` and went on to enjoy a hugely successful career.
Some of his other credits include `Zero Dark Thirty`, `The Mexican` and `Get Shorty`.
James also starred in the hit Broadway comedy `God of Carnage` in 2009, which won a prestigious Tony Award.
He recently completed filming the crime movie `Animal Rescue` alongside British actor Tom Hardy.