James 4:5 is one of the most difficult texts in the NT to translate and interpret. James appears to introduce a biblical quotation but then offers what most call not a quotation but a summary of something taught in the OT. Looking at the second half of the verse, more issues arise. First, grammatically, “the spirit” could be either the subject (1a) or the object (1b) of the verb “yearns.” Second, “the spirit” (2a) could be also be interpreted “the Spirit” (2b). Third, due to a textual variant, “caused to dwell” (3a) could be “dwells” (3b).

So, one could end up with a range of translations and interpretations: Option 1: (1a), (2a), and (3a): Man’s spirit has been caused to live in him by God, and this spirit has sinful envy (e.g., NIV). Option 2: (1a), (2a), and (3b): Man’s spirit lives in him and has sinful envy (e.g., KJV). Option 3: (1a), (2b), and (3b): God’s Spirit lives in man and is righteously jealous (e.g., NKJV). Option 4: (1b), (2a), and (3a): God has caused man’s spirit to be in him and is righteously jealous for that spirit (e.g., ESV). Option 5: (1b), (2b), and (3a): God has caused His Spirit to be in man and is righteously jealous for His Spirit (e.g., NASB). 

Thankfully, every position above is true. But perhaps #1 above is best for multiple reasons. First, The textual variant for “dwell” is almost certain to be “caused to dwell.” Second, word studies seem to cancel each other out. The noun “envy” is used eight other times in the NT, always with reference to sin (Matthew 27:18; Mark 15:10; Romans 1:29; Galatians 5:21; Philippians 1:15; 1 Timothy 6:4; Titus 3:3; 1 Peter 2:1). The verb “yearn” is used eight other times in the NT as some kind of righteous longing (Roman 1:11; 2 Corinthians 5:2; 9:14; Philippians 1:8; 2:26; 1 Thessalonians 3:6; 2 Timothy 1:4; 1 Peter 2:2). But these meanings don’t work in James 4:5—one does not righteously yearn unto sinful envy. Context decides their meanings. So, third, as the readers follow “passions” that lead to “quarrels and fights” (James 4:1) and choose to “desire” and “covet” in way that leads them to “murder” (figuratively; cf. 1 John 3:15) and “fight and quarrel” (James 4:2), so also James points to the source of their sins in another way—the spirit is bent on sinful envy (James 4:5). Fourth, just as James asks, “Do you not know” and negatively assesses their sin (James 4:4), so also he asks a parallel question, “Do you suppose it is to no purpose” and points to the OT’s teaching about the envy of man’s spirit (James 4:5; cf. Genesis 6:5; 8:21; Jeremiah 17:9). Fifth, taking James 4:5 as a negative statement about man’s spirit (it envies), James 4:6 immediately follows with a contrast: “But he [God] gives more grace.” James points to the problem in one verse and follows with a solution in the next.

The NIV captures the meaning best: “the spirit He [God] caused to live in us envies intensely.”