James Buford, regional director of the U.S. Public Health Services in Dallas, has emerged as the favorite to be named head of the D.C. Department of Human Services, city administration sources revealed yesterday.

Before accepting the post in Dallas, Buford was the federal government's chief troubleshooter at St. Elizabeths Hospital, the federal mental institution in Southeast Washington.

Reached by telephone last night, Buford acknowledged that City Administrator Elijah B. Rogers has talked with him about accepting the post as head of the city's largest agency.

Buford said, however, that he has not been formally offered the job. "I understand Mr. Rogers has been talking with several people," he said.

Rogers refused to say yesterday whether the decision had been made to appoint Buford director of the department, which touches the life of one Washingtonian in four every day. Rogers said an announcement could come before the end of the week.

But high-ranking administration sources said that Buford, 43, a highly regarded health administrator, has the inside track.

The sources said another candidate in the running is Dr. James Haughton, a Chicago physician.

Veteran administrator Albert P. Russo, resigned Monday as acting director of DHS. The agency was formerly called the Department of Human Resources.

In September 1977, then-secretary of Health, Education and Welfare Joseph Califano named Buford to direct the upgrading of St. Elizabeths, which had come under sharp criticism for the quality of its health care and had lost it's accreditation from the Joint Commission on Accreditation of Hospitals.

Two years later, St. Elizabeths regained the accreditation, which is not mandatory for hospitals but lends considerable prestige.

Buford received the Dallas appointment last September. Before joining Califano's team at HEW he was administrator of social services in Newark, N.J. He holds a bachelor's degree from Tennessee State College and a master's degree in public health from the University of Michigan.