Watson enlisted in the 7th U.S. Cavalry in 1875 in Cincinnati, Ohio. He was assigned to Company C, and served under Captain Thomas W. Custer. He participated in the Battle of the Little Bighorn River on June 25–26 June 1876, where, as his company approached the bluffs overlooking the river, Watson’s horse and that of another man, Peter Thompson, gave out. Watson was able to get his horse up again, but the two men were unable to keep up with their company, which was in a battalion under the command of Lt. Col. George Armstrong Custer. Watson and Thompson continued on to the river, but were unable to rejoin Custer. They returned to the bluffs and joined the remaining elements of the regiment under Maj. Marcus Reno.