The left-handed American, who a year ago felt overwhelmed on his return to defend the title he won in 2012, was a transformed character over four rounds this week, finishing with a three-under-par 69.
Having gone into the final round in a share of the lead with 20-year-old Spieth, Watson survived an early wobble to turn the tables on his compatriot, running out a three-shot winner on eight under.
Spieth, hoping to eclipse Tiger Woods by almost seventh months as the youngest winner of the Masters and become the first debutant champions since Fuzzy Zoeller in 1979, came up short with a closing level-par 72, his highest score of an impressive week. It meant a share of second place on five under with a fellow first-timer Jonas Blixt of Sweden, who shot a fourth-round, one-under-par 71.
From a 20-year-old in second place to 50-year-old Miguel Angel Jimenez in fourth on four under after a 71 with Americans Rickie Fowler (73) and Matt Kuchar (74) finishing tied for fifth on two under.
Spieth, an amateur only 18 months ago, looked cool, calm and collected as he began his round alongside the 2012 champion Watson.
Indeed, it was Watson who showed early signs of nerves as he bogeyed the thrid hole and Spieth birdied to open up a two-shot lead.
At the turn, though, the advantage had been flipped, Watson with a birdie at the par-four ninth, which Spieth, showing signs of that Texan temperament unravelling somewhat, bogeyed to fall two behind with nine to play and Kuchar and Blixt both pegged on four under.
Watson bogeyed the par-fourth 10th but it was Spieth who would fail to last the pace, his birdie-less inward nine undermined with a dip in the water at the par-three 12th.
That opened Watson's advantage to three shots and the 35-year-old showed his confidence at the par-five 13th, preferring to go for the jugular rather withdraw into conservativism. He launched his driver over the trees on the dogleg left corner leaving himself just a wedge into the green and though his approach shot desired a lot to be desired he emerged with a birdie, albeit replicated by Spieth.
Holes were running out for the young Texan, though, as it became clear it was Watson's tournament to lose. He would not and with pars all the way home there would be no need for the miraculous hook shot that delivered a play-off victory over Louis Oosthuizen at the 11th hole two years ago. Watson holed his putt on 18, put the ball in his pocket and greeted his son and wife in a tearful embrace.
As Spieth and Watson duelled for Masters supremacy during a tension-filled final round, Rory McIlroy was left to rue poor putting and a terrible negotiation of Augusta National's par-five holes.
Ireland's two-time major champion and world number nine finished his sixth Masters with his best round of the week, a three-under-par 69 which left him at level par for the tournament.
Yet even that lowest score of the opening major championship of the season served as a reminder of McIlroy's shortcomings around this revered Georgia course as the six birdies he sank were accompanied by three bogeys and a collection of missed opportunities.
Most damning of all was his scoring on the par-five holes at 2, 8, 13 and 15, where over four rounds on holes which any winner needs to pick up birdies or better, McIlroy managed to card a score of level par for the week.
He bogeyed both the 13th and 15th last night and cut a frustrated figure after signing for his 69, although he vowed to use the next fortnight's practice to get his putting in order and attack the remainder of the season with gusto.
“I've played well. I've driven the ball as well as I have, ever, I think,” McIlroy told the BBC. “I'm driving the ball so well, so long, and for the most par straight, and I've given myself so many opportunities for birdies. I'm just not holing the putts that I need to or that I should.
“So I've got a couple of weeks off to work on that and I'll hopefully come back to the Tour with a little more confidence in my short game and if my long game's still there it looks like it will be a good season.”
As for the par-fives, McIlroy was acutely aware of his shortcomings as another attempt at Masters glory went begging.
“I finished even par for the tournament, I've finished even par on the par fives. It's not good enough around here. You try and play the par fives at least 10 under par and if you look at some of the leaders I think that's what they'll finish on, somewhere around that for the par fives and that will obviously be good enough to win.
“So I'll come back next year, try and putt a little better and play the par fives better and you never know.”
Darren Clarke, Ireland's other survivor of the halfway cut, closed out his Masters with a 76 to finish the tournament at nine over par, while Graeme McDowell, who missed the cut for the second year in a row at Augusta National was already on his way south to Hilton Head Island for the defence next week of his RBC Heritage title as the PGA Tour resumes in South Carolina.