How can I upload files to a server using JSP/Servlet and Ajax?

To the point, as of the current XMLHttpRequest version 1 as used by jQuery, it is not possible to upload files using JavaScript through XMLHttpRequest. The common workaround is to let JavaScript create a hidden <iframe> and submit the form to it instead so that the impression is created that it happens asynchronously. That’s also exactly what the majority of the jQuery file upload plugins are doing, such as the jQuery Form plugin (an example).

Assuming that your JSP with the HTML form is rewritten in such way so that it’s not broken when the client has JavaScript disabled (as you have now…), like below:

<form id="upload-form" class="upload-box" action="/Upload" method="post" enctype="multipart/form-data">
    <input type="file" id="file" name="file1" />
    <span id="upload-error" class="error">${uploadError}</span>
    <input type="submit" id="upload-button" value="upload" />
</form>

Then it’s, with the help of the jQuery Form plugin, just a matter of

<script src="jquery.js"></script>
<script src="jquery.form.js"></script>
<script>
    $(function() {
        $('#upload-form').ajaxForm({
            success: function(msg) {
                alert("File has been uploaded successfully");
            },
            error: function(msg) {
                $("#upload-error").text("Couldn't upload file");
            }
        });
    });
</script>

As to the servlet side, no special stuff needs to be done here. Just implement it exactly the same way as you would do when not using Ajax: How can I upload files to a server using JSP/Servlet?

You’ll only need an additional check in the servlet if the X-Requested-With header equals XMLHttpRequest or not, so that you know how what kind of response to return for the case that the client has JavaScript disabled (as of now, it is mostly the older mobile browsers which have JavaScript disabled).

if ("XMLHttpRequest".equals(request.getHeader("X-Requested-With"))) {
    // Return an Ajax response (e.g. write JSON or XML).
} else {
    // Return a regular response (e.g. forward to JSP).
}

Note that the relatively new XMLHttpRequest version 2 is capable of sending a selected file using the new File and FormData APIs. See also HTML5 drag and drop file upload to Java Servlet and Send a file as multipart through XMLHttpRequest.