We present the results of a 127-ks XMM-Newton observation of the broad-line radio galaxy 3C 120 performed simultaneously with RXTE. The data have yielded the highest quality 0.6-10 keV spectrum of a radio-loud active galaxy ever produced. The time-averaged spectrum is Seyfert-like, with a reflection amplitude R similar to 0.5, and a neutral Fe Kalpha line with equivalent width similar to53 eV. The line is slightly broadened with a FWHM approximate to10(4) km s(-1). This is consistent with arising from an accretion disc radius of greater than or similar to 75 GM/c(2) at an inclination angle of 10, consistent with the limit of < 14 degrees derived from the radio jets. At low energies the spectrum requires excess absorption above the Galactic value and a soft excess that is best fitted with a bremsstrahlung model (kT = 0.3- 0.4 keV). The total luminosity in the bremsstrahlung component is just under half of the total hard X-ray luminosity. The emission may originate in either the broad-line region, or in giant H II regions adjacent to the nucleus. Weak O VII and O VIII edges are detected with high precision, suggesting the presence of a warm absorber component. Broad-band 0.6-50 keV fits to the data cannot unambiguously determine the accretion mode in 3C 120. A two-component ionized disc model, with a very highly ionized reflector presumably arising from very close to the black hole, is only a small improvement over a truncated disc model. The strength of the soft X-ray emission features produced by the distant neutral reflector are overpredicted in our solar abundance model, implying that the heavy metal abundance in 3C 120 is subsolar. Both broad-band models could also fit a much shorter archival XMM-Newton observation. The total count rate declined by 20 per cent over the course of the long observation, while small-scale rapid variability was present at the level of a few per cent. A possible increase in the Fe K line flux, significant at the 90 per cent level, was identified at similar to 80 ks in the observation. The total unabsorbed luminosity of 3C 120 implies that it is accreting close to its Eddington rate, consistent with a model of a highly ionized thick disc. A possible connection between accretion disc thickness and radio jet production is discussed.