Dave Watson began his playing career in the youth teams of his hometown club Barnsley. Progressing to the first team, he made 178 league appearances before injuring his knee in a game against Norwich in September 1998. After two years of trying to regain fitness, he retired in 2001. While at Barnsley Watson represented England in the 1993 FIFA World Youth Championship,where they finished in third place and won the FIFA fair play award. He also won five caps for England at under-21 level

He went on to work as goalkeeping coach with Northampton Town, Oldham Athletic, Huddersfield Town, Northampton Town again, the England under-19 team and Nottingham Forest before replacing Nigel Spink as goalkeeping coach of Birmingham City in January 2008.While in this position, Watson built a reputation as an excellent coach, praised for enhancing the careers of England goalkeepers Joe Hart, Ben Foster and Jack Butland, experience that encouraged new manager Roy Hodgson to invite him to work alongside Ray Clemence with the England team at Euro 2012

On 6th July 2012, he followed manager Chris Hughton from Birmingham to Norwich.

On 4th June 2013, Watson was linked by The Guardian with a move to Manchester City to replace Massimo Battara who left the Etihad Stadium with Roberto Mancini. Watson's relationship with keeper Joe Hart may be the nucleous of this report.

After spending June 2014 in Rio with the England World Cup squad, Watson left Noriwch to join Ronald Koeman's new management team at Southampton on 1st July 2014. He was appointed to the role of Assistant Coach in June 2019 with a new goalkeeping coach due to join the club.

He, along with Kelvin Davis and Craig Fleming, were dismissed from their roles on 26th May 2022 as Southampton embarked on a shake up of their coaching team after winning just one of their last 12 games in the 2021/22 Premier League season. They have though kept with manager Ralph Hasenhuttl.