Watson’s manager Jens Beck said in an email Wednesday that Watson’s friend died unexpectedly Tuesday night and that Watson has chosen to attend the funeral and pay his respects.
It is the second year in a row that Watson has withdrawn from Palmer's event. Last year, he shot 83 in the first round and withdrew because of allergies.
Watson's absence is a significant blow for the Arnold Palmer Invitational, which boasted each of the top-five players in the Official World Ranking.
One of the favorites for the upcoming Masters, Watson, ranked No. 2, was not scheduled to play the two upcoming events in Texas. It was not immediately known whether his plans will change before Augusta.
In five starts this season, Watson has a victory (WGC-HSBC Champoins) and no finish worse than 14th. He is coming off a solo third at Doral.