He was best known for his portrayal of Mac Cory on the daytime soap opera Another World. A character actor since 1950, his most notable roles were in the movies Julius Caesar (1953), Sayonara (1957), and The Money Pit (1986). He was also an acclaimed actor on the New York stage, acting in several Broadway and Off-Broadway productions, including the 1952 Broadway revival of Desire Under the Elms by Eugene O'Neill.
In addition, he played on such daytime dramatic dramas as Moment of Truth (1965) (a Canadian serial), Search for Tomorrow (1966–1968), and Love of Life (1972–1973). Watson's most iconic role was wealthy publisher Mac Cory on the soap opera Another World. He was the second actor to play the role, taking over from Robert Emhardt.
Watson earned the role after a critically acclaimed turn playing Kent in King Lear at the 1974 New York Shakespeare Festival. He portrayed the role from 1974 to 1989. He was under contract at the time of his 1989 death from a heart attack while on vacation in Arizona.
His character on the show also died shortly afterward. Douglass Watson is interred at Putnam Cemetery in Greenwich, Connecticut.