MX vs. ATV Alive

Once you get to Level 25, Bamboo Hills is where you'll meet him, on a 450cc MX bike, he does appear on Rookie difficulty too, your rivals are random, you'll know if he's in your race as he always gets a fantastic start so he'll always be in front.

He can be tricky to beat so suggest you do other races and upgrade your bike a fair bit before taking him on.

EDIT: he can be found on any National or Short track once you get to level 25, he's easiest to beat on Rookie on five laps at Kinoko - there's a great chance he'll get knocked off by another rider there - more so than anywhere else thanks to all the crossover points.

EDIT 2: BurstGamer Jedi has pointed out that you can beat him on any machine, he beat James Stewart on a 3 star 125cc MX bike.

You often see him in cutscenes throughout the game. Once you become a pro at LV. 25 it's no different. That's when he becomes an opponent, so think of him as a main boss. You'll also know it's time because you can use the MX 450s, and race on the harder tracks. He's a random opponent though, which means you may find yourself setting up the perfect race only to find he's not on the roster. His main difference from other riders is that he's extremely difficult to win against. I was attempting to beat him on National tracks but found it beyond my skill. Even on Rookie he seems to have a major advantage. However, you can counter any advantage he may have by racing on the short tracks and hoping for him to wreck. Here's my recommendations:

Bike: Blaze MX 450f (Level 2+)
Rider Skills: Quick Get Up & Wrecking Ball
Track: MX Battlegrounds (Short Track)
Difficulty: Rookie
Laps: 5
Opponents: MX450

With that setup you'll be on equal playing fields.

You need upgraded tires to handle the turns because you'll need speed to stay with and pass him. The skills Quick Get Up & Wrecking Ball because they work great when you're in a pack. With Wrecking Ball, when you're about to collide with someone it's better to be stronger than them, like against James. With Quick Get Up, if you do wreck it's always nice to be able to quickly get back into the action. There are a few reasons I chose the Battlegrounds instead of Kinoko. There's no possible time to catch back up if you're unlucky on Kinoko, but on the Battlegrounds you have enough straights to power thru to at least catch up. You're also crossing traffic more often, giving you more opportunities for James to wreck. The difficulty and laps are set for the easiest and shortest amount. Finally, make sure you're racing only against MX 450s because that's what he uses, he won't show up on anything else.

Make sure you're racing him first, if not exit the race and restart. You'll know when you're racing against him because he'll more often than not get the holeshot. Once you've found him, race clean, follow your lines, and don't wreck. If you do wreck the laps only take few seconds to complete. Finish the race, collect you XP and hit Y to restart.

Good luck! I hope this helps.