Watsons Bay is a harbourside, eastern suburb of Sydney, in the state of New South Wales, Australia. It is located 11km north-east of the Sydney central business district, in the local government area of the Municipality of Woollahra. The postcode is 2030.Watsons Bay sits on the end of the South Head peninsula and takes its name from the sheltered bay and anchorage on its western side, in Port Jackson (Sydney Harbour). It provides spectacular views across the harbour to the Sydney Harbour Bridge. The Gap is an ocean cliff on the eastern side with spectacular views to Manly at North Head and the Pacific Ocean. Vaucluse is the only adjacent suburb, to the south.
Watsons Bay is a mostly residential area with some recreational areas and beaches. Some restaurants, cafes and a hotel are located here, with Doyle’s on the Beach being one of the most famous Sydney seafood restaurants located on the foreshore of Watson’s Bay. The Sydney Harbour Pilot Boat Station is located on the bay, and the HMAS Watson naval station is located nearby at South Head