Prior to the city's establishment, the land was a Revolutionary War grant to Colonel Archibald Lytle and his brother William.

[1] Circa 1790, the grandparents of Watertown's founder, Wilson L. Waters, moved into the area.

[1] The Nashville and Knoxville Railroad built a depot in Watertown in 1885, making it the hub of business in the area.

During the recovery period following the fire, a town square surrounded by brick building was laid out, creating the core of the current city of Watertown.

[7] According to the United States Census Bureau, the city has a total area of 1.2 square miles (3.1 km2), all land.

[citation needed] Watertown is served by Wilson County Schools.