Waterbury was the son of Colonel Jonathan Waterbury (d 1828) and Elizabeth (Jarvis) Waterbury, a niece of Bishop Abraham Jarvis. He married Nancy D. M. Gibson (d 1897), and they had three daughters and a son—Nelson J. Waterbury Junior., who became in 1884 his father"s law partner.
The elder Waterbury studied law, was admitted to the bar, and in 1842 formed a partnership to practice law with Samuel J. Tilden.
From 1845 to 1849, Waterbury was a justice of the New York City Marine Court. In 1855, he was appointed by Postmaster of New York City Isaac V. Fowler as his assistant and established the first sub-postal station in the city. He was New York County District Attorney from 1859 to 1861, elected on the Democratic ticket in November 1858, but defeated for re-election in 1861 by Republican A. Oakey Hall.
In March 1862, he was elected Grand Sachem of Tammany Hall.
In 1863, Waterbury was appointed by Government. Horatio Seymour Judge Advocate General of the State Militia.
In 1865, he resumed the practice of law. After Tweed"s fall, Waterbury returned to Tammany Hall, but left again in 1875 disagreeing with John Kelly.
Waterbury returned to Tammany Hall in 1890, being an admirer of Richard Croker and Mayor Thomas F. Gilroy.
Waterbury was elected a delegate to the New York State Constitutional Convention of 1894, but died three weeks before the convention metropolitan He died of pneumonia at his residence at 13 West 56th Street in Manhattan.
Although Waterbury left Tammany Hall after William M. Tweed became the boss, he defended Tweed at his trial following the fall of the "Tweed Ring".
