For Canada, Watson has appeared 78 times for the 'A' national team during a 14-year span. He has played in four World Cup qualifying campaigns. and on the 2000 CONCACAF Gold Cup side that won the tournament. Watson scored the winning goal for Canada in the semi-final of the 2000 Gold Cup, a match Canada won 1–0 over Trinidad and Tobago.
Watson became interim head coach of San Jose Earthquakes on June 7, 2013. Watson was introduced as the new head coach of the Earthquakes by general manager John Doyle at the club's 2013 Award Gala on Oct. 27 at The Fourth Street Summit Center in Downtown San Jose. Watson was 11-5-3 during his 19 league games as head coach, nearly rallying the Earthquakes to an MLS Cup Playoff berth. His mark 1.89 points per game was tops among all coaches after he took over. In addition to his success during MLS regular season games, Watson's squad advanced to the 2013-14 CONCACAF Champions League Quarterfinals by winning Group 5. Following these successes and the gala, on October 30, 2013, the Earthquakes announced that they have signed Watson to a long-term deal, thereby removing the "interim" tag his position had had .
Watson's first win as an MLS head coach came on June 15, 2013 against the Colorado Rapids at Dick's Sporting Goods Park. The Earthquakes won 2-1 in what was also Watson's first game as an MLS head coach.
Prior to becoming the club’s interim head coach in June, Watson served as an assistant coach to Frank Yallop starting in 2010. He began his coaching career in 2004 with the Canadian national team system where he held assistant positions with the U-20 and senior squads. Watson served as assistant coach for Canada at the 2004 CONCACAF Men's Olympic Qualification Tournament and was an assistant when the team finished third in the same tournament in 2008. He also spent four seasons as an assistant coach for the Charleston Battery from 2006-09.