Watson B. Smith was born to Rollin Coleman and Mary Amanda (Birchard) Smith in Vermont on October 2, 1837. He was the second of five children: Mary Narcissa (born 1835), Rollin Burnham (born 1843), Ellen Amanda (born 1850), and Howard B. (born 1852). Watson Smith enlisted in the Union Army as a Commissary Sergeant in Company C of the 8th Michigan Cavalry Regiment on August 27, 1862. He was promoted multiple times: to Lieutenant on November 6, 1862; to Acting Adjutant General on October 29, 1863; to Captain on April 15, 1864; to Major on November 14, 1864; to Brevet Lieutenant Colonel on March 13, 1865; and finally to Brevet Colonel on September 22, 1865. He was discharged in Detroit on October 6, 1865.

After the war ended, Smith returned to his family, which had relocated to Omaha, Nebraska. He married Frances Reid Coon in Omaha on December 15, 1869 and the couple had one known child, Watson B. Smith, Jr. He later became a Clerk in the U. S. Circuit Court and was murdered on November 5, 1881 over his support for a "blue law" that would force saloons to pay a $1,000 dollar license fee and close on Sunday.

It should be noted that several sources give Watson B. Smith's name as "Watson Richard Smith." The middle initial "B" has here been accepted as authoritative due to its predominance in primary and contemporary newspaper accounts.