Watertown is the most populous city in the Watertown-Fort Atkinson micropolitan area, which also includes Johnson Creek and Jefferson.

Watertown was first settled by Timothy Johnson, who built a cabin on the west side of the Rock River in 1836.

The area was settled to utilize the power of the Rock River, which falls 20 feet (6.1 m) in two miles (two 10-foot (3.0 m) dams).

In contrast, the Rock River falls only 34 feet (10 m) in 58 miles (93 km) upstream from Watertown.

They were part of a wave of New England farmers who headed west into what was then the wilds of the Northwest Territory during the early 1800s.

When they arrived in what is now Watertown there was nothing but dense virgin forest and wild prairie, the New Englanders laid out farms, constructed roads, erected government buildings and established post routes.

They brought with them many of their Yankee New England values, such as a passion for education, establishing many schools as well as staunch support for abolitionism.

Unlike instances in other parts of the country in which they faced discrimination and xenophobia, they were welcomed with open arms by the English-Puritan descended "Yankee" population of Watertown and Jefferson County as a whole.

This warm reception led to chain migration, which in turn greatly increased the German population of the region.

[15] The territorial legislature incorporated the Milwaukee and Rock River Canal company in 1836, but the plan was abandoned in 1848.

The canal would have provided a waterway between the Great Lakes and the Mississippi River, but even if completed, it may not have seen much success because railroads had already become the preferred mode of transportation.

It is referred to in the "Plank Road Brewery" family of beers, produced by Miller Brewing Company in Milwaukee.

Growth of the city was substantially hampered when Watertown issued almost half a million dollars in bonds to support the building of two railroads to town to encourage further growth: the Chicago & Fond du Lac Company and the Milwaukee, Watertown & Madison Road.

[17] The success of the plank road convinced residents that a railroad would be even more beneficial, and bonds were issued from 1853 to 1855.

The Milwaukee and Watertown Railroad, as it was called before it extended to Madison, was completed in 1855, only the second line in the state.

The bonds were sold by the original investors to out-of-town speculators at a small fraction of their face value.

Moreover, the city did not feel compelled to do so because the creditors (those who held the bonds) were not only from out of town, but weren't even the original holders.

The most notable geographical feature is a high density of drumlins, long hills formed by the glaciers of the Wisconsin glaciation as they retreated northwards.

The operations occur mostly within a small rail yard directly connected to the Canadian Pacific mainline.

[27] Watertown Municipal Airport (KRYV) provides service for the city and surrounding communities.

Amtrak's Empire Builder and Borealis passenger trains pass through, but do not stop in Watertown.

[28] Plans to extend some Hiawatha trains from Milwaukee to Madison include the possibility of adding a stop in Watertown.

[37] WJJO 94.1 FM was originally in Watertown, but is now also located in Madison with an active rock format.

Watertown is still well served by radio stations from the Madison, Milwaukee and Janesville markets as well as signals originating from surrounding towns.