Answer: This is perhaps the most important question in all of Christian theology. This question is the cause of the Reformation, the split between the Protestant churches and Catholic Church. This question is a key difference between biblical Christianity and most of the “Christian” cults. Is salvation by faith alone, or by faith plus works? Am I saved just by believing in Jesus, or do I have to believe in Jesus and do certain things?
The question of faith alone or faith plus works is made difficult by some hard-to-reconcile Bible passages. Compare Romans 3:28, 5:1 and Galatians 3:24 with James 2:24. Some see a difference between Paul (salvation is by faith alone) and James (salvation is by faith plus works). Paul dogmatically says that justification is by faith alone (Ephesians 2:8-9), while James appears to be saying that justification is by faith plus works. This apparent problem is answered by examining what exactly James is talking about. James is refuting the belief that a person can have faith without producing any good works (James 2:17-18). James is emphasizing the point that genuine faith in Christ will produce a changed life and good works (James 2:20-26). James is not saying that justification is by faith plus works, but rather that a person who is truly justified by faith will have good works in his/her life. If a person claims to be a believer, but has no good works in his/her life, then he/she likely does not have genuine faith in Christ (James 2:14, 17, 20, 26).
Paul says the same thing in his writings. The good fruit believers should have in their lives is listed in Galatians 5:22-23. Immediately after telling us that we are saved by faith, not works (Ephesians 2:8-9), Paul informs us that we were created to do good works (Ephesians 2:10). Paul expects just as much of a changed life as James does: “Therefore, if anyone is in Christ, he is a new creation; the old has gone, the new has come” (2 Corinthians 5:17). James and Paul do not disagree in their teaching regarding salvation. They approach the same subject from different perspectives. Paul simply emphasized that justification is by faith alone while James put emphasis on the fact that genuine faith in Christ produces good works.
Recommended Resource: Faith Alone: The Evangelical Doctrine of Justification by R.C. Sproul.