He also made enemies. Norris Wright, Rapides parish sheriff and local banker, refused to make a loan that Bowie sorely needed. In 1826 Bowie met Wright in Alexandria, where tempers flared and Wright fired point-blank at Bowie; but the bullet was deflected. After this encounter,  Rezin gave his brother a large butcher-like hunting knife to carry. On September 19, 1827, near Natchez, Jim Bowie participated in the Sandbar Fight, which developed during a duel between Samuel Levi Wells III and Dr. Thomas Maddox. After the principals had exchanged shots without effect, two observers continued the affair. Alexander Crain fired at Samuel Cuny, and when Cuny fell, Bowie fired at Crain but missed.  Wright shot Bowie through the lower chest, and Bowie, said an eyewitness, "drew his butcher knife which he usually wears" and chased Wright. The Blanchard brothers shot Bowie in the thigh, and Wright and Alfred Blanchard stabbed him in several places. As Wright bent over him, Bowie plunged the knife into his assailant's breast, then raised himself and slashed Blanchard severely. All the witnesses remembered Bowie's "big butcher knife," the first Bowie knife. Reports of Bowie's prowess and his lethal blade captured public attention, and he was proclaimed the South's most formidable knife fighter. Many men asked blacksmiths and cutlers to make a knife like Jim Bowie's.

On February 20, 1830, Bowie and his friend Isaac Donoho took the oath of allegiance to Mexico. Bowie, age thirty-four, was at his prime. He was well traveled, convivial, loved music, and was generous. He also was ambitious and scheming; he played cards for money, and lived in a world of debt. There Bowie learned that a Mexican law of 1828 offered its citizens eleven-league grants in Texas for $100 to $250 each. (A league was 4,428.4 acres.)  Bowie urged Mexicans to apply for the eleven-league grants, which he purchased from them. He left Saltillo with fifteen or sixteen of these grants, and continued to encourage speculation in Texas lands.

In San Antonio, Bowie posed as a man of wealth, attached himself to the wealthy family of Don Juan Martin Veramendi, governor of the province of Texas and vice-governor of the Mexican state of Coahuila y Texas and sponsored by the Veramendis, was baptized into the Catholic Church. In the autumn of 1830 he accompanied the family to Saltillo, and on October 5 officially became a Mexican citizen.

He settled in San Antonio de Bexar and on April 23, 1831, married Ursula Veramendi, the daughter of  Don Juan Martin Veramendi.  Veramendi family tradition says Bowie spent little time at home. He apparently became fascinated by tales of the "lost" Los Almagres Mine, said to be west of San Antonio near the ruin of Santa Cruz de San Sabá Mission. Bowie obtained permission from Mexican authorities for an expedition into Indian country financed by the Veramendis, and on November 2, 1831, he left San Antonio with his brother Rezin and nine others. On the nineteenth they learned that a large Indian war party was following them, and six miles from San Saba, Bowie camped in an oak grove. An attempt to parley failed. Bowie's men fought for their lives for thirteen hours. The Indians finally drew off, reportedly leaving forty dead and thirty wounded. Bowie lost one man killed and several wounded. The party returned to San Antonio. On January 23, 1832, Bowie made another foray to the west. He now carried the title of "colonel" of citizen rangers. He left Gonzales with twenty-six men to scout the headwaters of the Colorado for Tawakonis and other hostile Indians. After a fruitless search of 2½ months, he returned home. 

In September, 1833, while Bowie was away on a business trip, his wife and in-laws were tragically killed by the cholera epidemic.  Bowie returned to the empty Vermandi house in San Antonio, and turned to the bottle. When war came the Texas government would not give him a commission, but Houston found him useful and treated him as a colonel, based on his ranger service for Veramendi. But if he sent Bowie to the Alamo with the expectation he would evacuate the fort, he had picked the wrong man. By going back to San Antonio, Bowie was going home. Retreat would not have occurred to him.

At the outbreak of the Texas Revolution, in charge of a Texas Ranger company. He took part in the Battle of Conception on October 28, 1835. Later, at Bexar, he was an aide-de-camp to General Stephen F. Austin. When Austin left his position to solicit aid, Bowie was an unsuccessful candidate to fill this position. Bowie was then appointed by Sam Houston to remove cannons from the Alamo and then join the Texas Army. Bowie later shared command of volunteer troops with William B. Travis. When the advanced guard of the Mexican Army took possession of Bexar on February 23, 1836 and this led to the Battle of the Alamo.

On February 24 Bowie, who was suffering from a disease "of a peculiar nature," which has been diagnosed as pneumonia or typhoid pneumonia but probably was advanced tuberculosis, collapsed, ending his active participation in commanding the garrison. He was confined to a cot and urged the volunteers to follow Travis. He was occasionally carried outside to visit his men.

On March 6 the Mexicans attacked before dawn, and all 188 defenders of the Alamo perished. Santa Anna asked to see the corpses of Bowie, Travis, and Crockett, and Bexar mayor Francisco Ruiz identified the bodies. Bowie lay on his cot in a room on the south side. He had been shot several times in the head.

During his lifetime he had been  described by his old friend Caiaphas K. Ham as " a clever, polite gentleman...attentive to the ladies on all occasions...a true, constant, and generous friend...a foe no one dared to undervalue and many feared." Slave trader, gambler, land speculator, dreamer, and hero, James Bowie in death became immortal in the annals of Texas history.