Watertown is a very small city located in the state of Minnesota. With a population of 4,791 people and two associated neighborhoods, Watertown is the 168th largest community in Minnesota. Watertown has seen a significant amount of newer housing growth in recent years. Quite often, new home construction is the result of new residents moving in who are middle class or wealthier, attracted by jobs, a healthy local economy, or other amenities as they leave nearby or far away areas for greener pastures. This seems to be the case in Watertown, where the median household income is $93,008.00.

Telecommuters are a relatively large percentage of the workforce: 19.07% of people work from home. While this number may seem small overall, as a fraction of the total workforce it is high relative to the nation. These workers are often telecommuters who work in knowledge-based, white-collar professions. For example, Silicon Valley has large numbers of people who telecommute. Other at-home workers may be self-employed people who operate small businesses out of their homes.

The population of Watertown overall has a level of education that is slightly above the US average for all US cities and towns of 21.84%. Of adults 25 and older in Watertown, 22.16% have at least a bachelor's degree.

The per capita income in Watertown in 2022 was $41,419, which is upper middle income relative to Minnesota and the nation. This equates to an annual income of $165,676 for a family of four. However, Watertown contains both very wealthy and poor people as well.

The people who call Watertown home describe themselves as belonging to a variety of racial and ethnic groups. The greatest number of Watertown residents report their race to be White, followed by Asian. Important ancestries of people in Watertown include German, Norwegian, Swedish, Irish, and English.

The most common language spoken in Watertown is English. Other important languages spoken here include Polish and Greek.