The Escanaba & Lake Superior Railroad built a branch to Watson from Wells, Michigan, in 1898. Watson was named after Isaac Watson Stephenson, a politician and lumber man who was founder of the E&LS Railroad and owned a sawmill in Wells. The station at Watson was the end of the line on the railroad until 1900 when it was continued to Channing to connect with the Milwaukee Railroad for the purpose of hauling iron ore to the Milwaukee Road Docks in Escanaba. The E&LS railroad, nicknamed Eggs & Liver Sausage because of its reporting marks, was built when shipping lumber by rail became predominant over bygone methods. Before shipping by railroad, timber from Watson area logging operations was sent by way of the Ford River Switch on the Escanaba River or by sleighs in the winter to the Stephenson Lumber Company Mill in Wells.

The town of Watson operated as a rail stop and a center for loggers and lumberjacks. The boarding house in Watson lodged area lumberjacks and logging officials. Watson’s warehouse stored supplies from Minneapolis and was used for dances and community events. Children in the area took classes in Watson’s one room school house.

The Watson general store opened in 1906 and housed the post office, was conveniently located next to the town saloon, and sold gasoline for cars in later years. The general store owners also ran the black smith shop. The general store was the center of Watson’s community and people would gather there around the wood stove to talk.

The sawmill in Wells closed in 1943 and the ore business in the area had disappeared by the late 1930s. Watson relied on the Escanaba branch of the railroad, which saw dwindling numbers of passengers, usually having less than five a month. In 1956, the E&LS retired its passenger cars — the prevalence of the automobile had carried off the last patrons of the passenger lines. The line continued to carry pulpwood and materials for manufacturers to and from Escanaba. The Watson general store became an IGA in 1954 and closed for good on Thanksgiving Day in 1979. The post office in Watson was discontinued in 1961. In 1992, the railroad route Watson depend on was fully taken out of service.