Watsons Bay is the broad, sheltered bay on Lizard Island's north-western side and the island's easiest access to the reef. Queensland Parks runs the island's camping ground on the beach here, and the bay's fringing reef and famous Clam Gardens are reachable by a short swim from the sand. The resort's Hike & Snorkel tour ends here, and yachts often anchor in the bay.

The bay is shallow and sandy near the beach, deepening gently towards the reef edge. The fringing reef supports hard and soft corals, anemones and a variety of reef fish; the highlight is the Clam Gardens in the middle of the bay (see separate entry), where giant clams up to about 2 m long sit among the coral. Queensland Parks advises that the best time to snorkel is high tide, accessing the reef from the shore at the southern end of the beach.

The bay is named after Mary Watson, who lived on the island in the early 1880s with her husband, a bêche-de-mer fisherman; after an attack by Aboriginal people she fled in an iron tank with her infant son and a Chinese servant, and all three died of thirst on a nearby island. Ruins of her cottage remain near the beach. As a shore site, Watsons Bay suits independent snorkellers and campers, and it is also one of the few places on the Great Barrier Reef where you can walk off a beach onto a healthy reef with giant clams.

Scuba is possible from shore for those with their own equipment and fills, but most visitors snorkel. Conditions are generally calm thanks to the bay's orientation, but wind and tidal currents can affect the outer parts of the bay. Queensland Parks warns about stingers and crocodiles, which can appear anywhere in croc country.

Lizard Island lies about 27 km off the Cape York coast and roughly 240 km north of Cairns. Most visitors fly: resort guests take the scheduled light-aircraft transfer from Cairns (about 1 hour) to the island airstrip, and campers can charter flights or arrive by private boat. There is no public ferry.

The dive and snorkel sites are reached by the Lizard Island Resort dive centre's boats (reserved for resort guests) or by liveaboards – Spirit of Freedom uses Lizard as the fly-in/fly-out changeover point for its 3- and 4-night trips, and Mike Ball's Spoilsport visits on Cairns-based expeditions. Campers at Watsons Bay must carry gear about 1.2 km from the airstrip and bring all supplies.

Lizard Island sits in the path of the south-east trade winds, which blow strongly (often 20–30 knots) from about April to September. The island's western and northern bays (Watsons Bay, Mermaid Cove, Anchor Bay) are sheltered, but open-water crossings to the outer ribbon reefs (Cod Hole, Dynamite Passage, No Name) can be rough and are cancelled in strong winds. October–December usually brings lighter winds and the clearest water; the wet season (December–April) brings northerly winds, storms, cyclone risk and marine stingers (November–May).

Tides are significant – shallow bay snorkelling (e.g. Clam Gardens) is best around high tide. Visibility around the island is typically 10–20 m; the outer ribbon reefs often exceed 25 m.

Enter at the southern end of the beach around high tide and fin out over the sand to the reef edge; snorkel north through the Clam Gardens at 2–5 m and along the fringing reef, then swim back parallel to the beach and exit where you entered.

Lizard Island Resort runs guided 'Hike & Snorkel' tours to Watsons Bay for guests; campers and yachties snorkel independently. Scuba from shore is possible only with your own gear and fills (none available to non-resort visitors).