Watertown is the largest city in the Watertown-Fort Atkinson micropolitan area, which also includes Johnson Creek and Jefferson. The 2005 population of the micropolitan area was 79,328.
As of the census of 2000, there were 21,598 people, 8,022 households, and 5,567 families residing in the city. The population density was 1,974.1 people per square mile (762.3/km²). There were 8,330 housing units at an average density of 761.4/sq mi (294.0/km²). The racial makeup of the city was 95.90% White, 0.25% African American, 0.39% Native American, 0.61% Asian, 0.03% Pacific Islander, 1.69% from other races, and 1.13% from two or more races. Hispanic or Latino of any race were 4.94% of the population.
There were 8,022 households out of which 34.9% had children under the age of 18 living with them, 56.2% were married couples living together, 9.5% had a female householder with no husband present, and 30.6% were non-families. 25.5% of all households were made up of individuals and 12.1% had someone living alone who was 65 years of age or older. The average household size was 2.55 and the average family size was 3.07.
In the city the population was spread out with 26.0% under the age of 18, 10.3% from 18 to 24, 29.6% from 25 to 44, 19.4% from 45 to 64, and 14.7% who were 65 years of age or older. The median age was 35 years. For every 100 females there were 93.9 males. For every 100 females age 18 and over, there were 90.0 males.
The median income for a household in the city was $42,562, and the median income for a family was $50,686. Males had a median income of $34,825 versus $23,811 for females. The per capita income for the city was $18,977. About 4.6% of families and 6.7% of the population were below the poverty line, including 7.8% of those under age 18 and 6.9% of those age 65 or over.
Primary automobile transportation is provided via Highways 19, 26 and 16. Highway 19 begins in Watertown and runs westward. Highway 16 runs east-west across Wisconsin from Milwaukee to La Crosse, passing around Watertown via a bypass. Highway 26 runs north-south through the center of the city. Highways 26 and 16 provide access to Interstate 94. Highway 16 provides access to the Milwaukee metro area and highway 19 provides access to the Madison metro area.
General aviation is provided by the Watertown Municipal Airport.
Amtrak's Empire Builder passes through, but does not stop in, Watertown. The Milwaukee to Madison leg of the Midwest Regional Rail Initiative is planned to pass through Watertown.