The priory stood on the north side of St James’s Street, formerly known as St James’s Lane, adjacent to the Markeaton Brook.
There had been a chapel dedicated to St James on the site from the Saxon era. Between 1072 and 1076, Waltheof, Earl of Huntingdon and Northumbria gave the chapel to the Benedictine monks of Bermondsey Abbey, who quickly developed it into a priory. The donation of the chapel was confirmed by King Stephen around 1140.
The Corporation of Derby (a forerunner of Derby City Council) paid the priory two pounds of wax each year for the right of the citizens of Derby to cross St James Bridge, constructed by the monks.