Cameron, of course, directed "Titanic," the most profitable movie ever made. And he famously declared himself "King of the World" when Titanic won 11 Oscars in 1998. Since then he has been immersed in a wildly ambitious and very expensive 3D science fiction fantasy that mixes real actors with computer generated creatures, the sum of which he believes will change the movie business forever.
The movie is "Avatar," and 70 years after Judy Garland left Kansas for Oz, Cameron plans to take audiences down the Yellow Brick Road of the 21st century, pushing the limits of modern technology with some filmmaking magic he has helped invent.
"I've been working up to this for a long time. This is the film I always thought I wanted to make when I set down the path of being a filmmaker," Cameron told 60 Minutes correspondent Morley Safer.
Avatar is set on the moon Pandora, a fantasy Eden, which earthlings want to exploit. It's a Shangri-la created entirely by computers.
"You're creating a world, every creature in it, every blade of grass, every tree, every cloud in the sky, every little reflection in the eyes of the characters," Cameron explained.
It's part cross-cultural love story, part high adventure. About the only thing that's done the old-fashioned way is the music.
On the set, there are far more computer jockeys than stage hands. Avatar is made up of some 3,000 separate shots, each one containing layer upon layer upon layer of special effects.
"What's interesting to me is that, with all the technical changes it always comes down to the story, no?" Safer asked.
"It all boils down to the story and to this, right there, you know, right in the eyes," Cameron replied.
Cameron's stars are Sigourney Weaver, Sam Worthington and Zoe Saldana. But in a sense, the real stars are the inhabitants of Pandora: ten foot tall blue people with tails.
Asked why he gave them long tails, Cameron told Safer, "Well, tails are cool. Tails are very expressive. I mean, anybody that owns a dog or a cat knows that you can tell the cat's emotional state by what its tail's doing."
And this very tall tale is very expensive: roughly $400 million-plus for production and promotion. At a hi-tech complex on the 20th Century Fox lot, on the very spot where Marilyn Monroe proclaimed that gentlemen prefer blondes, Cameron works down to the wire, supervising the final tweaks to Avatar.
His fantasy creatures are based on performances by the real actors. Cameras record dots on their faces. Computers then analyze their expressions and bring the blue people to life, characters both otherworldly yet strangely like ourselves.
On a satellite link are experts at a special effects studio a world away in New Zealand. It's there the final images are processed.
"We're going through and we're analyzing every last detail within the shot to make sure that it's up to snuff. We can make the grass greener or yellower, we can make the sky bluer, all those things," Cameron explained.
"And you can now just do what you want to do electronically?" Safer asked.
"Sure," Cameron said. "Even when we were doing Titanic twelve years ago, you know, the shot at the bow where they kiss, we waited two weeks for the right sunset to get that shot. Now we'd just shoot it in front of a green screen and choose the right sunset later, you know, digitally."
Shooting actors against a green screen and filling in the background by computer is a brutally time consuming process.