James Liston was born in Dunedin on 9 June 1881, one of a family of five children of James Liston, a hotel-keeper, and his wife, Mary (née Sullivan). His parents were both born in Ireland. He was educated at Christian Brothers' School, Dunedin. At the age of 12 in 1893 he began his training for the priesthood at St Patrick's Seminary, Manly, Sydney. He later attended Holy Cross College, Clonliffe, Dublin (1897–1900), and then went on to the Irish College in Rome from which he graduated in 1903 with a doctorate of divinity.