Watarai is an inland municipality, located in eastern Kii Peninsula, near the geographic center of Mie Prefecture.

Watarai has a Humid subtropical climate (Köppen Cfa) characterized by warm summers and cool winters with light to no snowfall.

The villages of Ogawago, Uchikida, Ichinose, and Nakagawa were established within Watarai District, Mie Prefecture with the creation of the modern municipalities system on April 1, 1889.

Watarai has a mayor-council form of government with a directly elected mayor and a unicameral town council of 11 members.

In terms of national politics, the town is part of Mie 4th district of the lower house of the Diet of Japan.