It features tools for developing and debugging code for DOS, OS/2, Windows, and Linux operating systems, which are based upon 16-bit x86, 32-bit IA-32, or 64-bit x86-64 compatible processors.

There is ongoing work to extend the targeting to Linux[10] and modern BSD (e.g., FreeBSD) operating systems, running on x86, PowerPC, and other processors.

[13] Current development for FreeDOS requires that all C source code must be compilable by Open Watcom C.[14] Open Watcom is the recommended compiler for application and driver development for the OS/2-based ArcaOS operating system.

Three C99 features have been bundled as C90 Extension since pre-v1.0: C++ style comments (//), flexible array members, trailing comma allowed in enum declaration.

In a February 1989 overview of optimizing C compilers, BYTE praised Watcom C 6.5's "unmatched execution speed" and noted that it was the most ANSI C-compliant.

The magazine advised, "If speed is absolutely critical and OS/2 compatibility isn't, choose Watcom".