The defender, who has signed a new five-year deal, was sent on loan to Wigan last season, where he missed just one league game and claimed a clean sweep of individual honours at their end-of-season awards before his return to Chelsea.
The 20-year-old has made 18 appearances for the Blues this season, scoring on his debut in Chelsea’s Carabao Cup 7-1 victory against Grimsby Town. His dramatic equaliser earned the Blues a Champions League point against Ajax in a thrilling 4-4 draw at Stamford Bridge in November.
James suffered an ankle injury in the summer while playing for England Under-20s at the Toulon Tournament but remained in Frank Lampard’s plans despite a three-month spell on the sidelines and has started Chelsea’s past three games in all competitions.
He signed for Chelsea at Under-9 level having trained at Cobham since the age of six. He progressed steadily through the academy ranks having initially started out as a striker before moving further back into midfield and defence, where he settled as a combative and energetic full-back, although those attacking instincts have remained with him over the years.
On signing his new five-and-a-half-year deal, the defender said: “It has been my dream to be here at Chelsea and play week in week out and to have a contract for another five-and-a-half years is living the dream again.
“I have always wanted to be here and another five-and-a-half years means a lot to me and a lot to my family.”
Chelsea director Marina Granovskaia added: “The smooth way Reece has fitted into the team so quickly despite missing the start of the season has been clear for everyone to see.
“Reece started his football education with us at the age of six and his performances on loan at Wigan last season paved the way for a strong beginning to his career in the Chelsea team.
“We’re very pleased he now has the perfect opportunity to build on that and become a major player for us for many years to come.”