Earlier in the season, Watson captured the Senior PGA Championship, the major that had eluded him while on the PGA Tour.
Now, he is vying for his first Players Championship title ' Senior style.
Watson shot a 4-under-par 68 to tie Hale Irwin (65) for the 36-hole lead at the Ford Senior Players Championship in Dearborn, Mich.
The two stand at 9-under-par 135, one shot clear of Allen Doyle (69). Ed Dougherty (70) and Larry Nelson (70) share fourth place at 7-under.
Watson started the day in a five-way tie for first place with Dougherty, Nelson, Doyle and Raymond Floyd. The defending champion struggled to a 1-over-par 73. He starts the weekend five shots off the pace at 4-under.
1990 Players champion Jack Nicklaus withdrew from the seasons final major after nine holes on Friday because of a sore hamstring and herniated disc.
Nicklaus said he could have continued but didnt want to risk further injury. The 61-year-old found out Monday he had a herniated disc and pulled his right hamstring in Wednesdays pro-am.
Nicklaus, who opened in 77, shot a 2-over 38 over nine holes in the second round. He still plans to play in the Senior British Open in two weeks.
That means theres one less old-school rival for Watson to battle over the weekend on the TPC of Michigan.
Friday, Watson went out in 1-under 35, but managed to birdie three of his first four holes on the back nine. Despite a bogey on the par-3 15th, Watson birdied the par-4 17th to tie Irwin for the top spot at 9-under.
It was a very similar round to yesterday, Watson said. My game was better off the tee and not quite as good with the irons in my hand. I didnt run the tables on the greens like I did yesterday. But I still putted well.
Irwin putted even better. After posting a pair of birdies in a front-nine 34, the 1999 Senior Players champion birdied holes 11-14. He then concluded his scoring with a birdie-3 on the home hole.
I didnt strike the ball the way I wanted, but all in all, I think the round goes to my putter today, said Irwin, who hit 13 of 18 greens in regulation and took 25 putts.
U.S. Senior Open champion Bruce Fleisher (67) is three shots back at 6-under. Hes one shot in front of Tom Kite, who shot 68. Doug Tewell (66), Vicente Fernandez (69) and Gil Morgan (68) are tied with Floyd for 11th place at 4-under-par.
Full-field scores from the Ford Senior Players Championship