Twice Masters champion Watson, buoyed by a one-hop ace at the fourth hole, finished at five-under-par 22 on the short, nine-hole layout that is the site of one of the most beloved traditions at Augusta National.
Watson will make his first Masters start since he joined LIV Golf last July when he and 17 others from the Saudi-backed circuit tee off in Thursday's opening round of the year's first major.
"Keep hitting the ball well," Watson said on Wednesday after the Par-3 Contest when asked about his aspirations for the rest of the week, which has plenty of rain in the forecast.
"I was hitting the short irons well on the Par-3 here. Been hitting it good all week. With the weather coming in, nobody knows what's going to happen."
Perhaps Watson can take comfort in falling short of the Par-3 title given that winning the fun-filled event, where players can use friends and family as caddies, has proven to be a bad luck omen for the main Masters tournament.
Since its inception in 1960, no Par-3 Contest winner has won the Masters the same year.
Luck of the Irish
Ireland's Seamus Power (36) finished the Par-3 Contest in style as he hit back-to-back aces on the final two holes of the short course at Augusta National on Wednesday.
Power, whose brother caddied for him, hit a sand wedge on the 120-yard eighth hole that landed 30 feet beyond the pin and spun down the slope into the cup and essentially copied that shot on the 135-yard closing hole with the same ball.
"It's a dream come true," Power said after carding two of the five holes-in-one recorded on Wednesday.
"Obviously, to get one was special, but to get the second one was a bit surreal. It was an absolute blast out there."
It marked the first time the Irishman, a two-times winner on the PGA Tour, recorded consecutive holes-in-one which he said brought his career total to 16.
"Being able to share it with my brother out there, that was probably the best part," said Power, who will make his second Masters start on Thursday after finishing joint 27th last year.
"I don't know whether it carries into tomorrow, but it's certainly a lifelong memory that I'll treasure for a long time."
There have now been 106 holes-in-one made in the history of the light-hearted nine-hole event at Augusta National.