The opener fended off a fiery opening spell from Mohammad Aamer (2-43) to end the day 64 not out and guide Australia to 111-3 at close of play.
Earlier, left-armers Doug Bollinger and Mitchell Johnson each took three wickets to dismiss Pakistan for 258.
Umar Akmal (51) and Misbah-ul-Haq (65 not out) provided the sole resistance.
Teenager Umar provided one of the highlights of the day when he rolled four successive boundaries off Peter Siddle, bringing up his half century with his ninth boundary.
However, the very next ball saw him edge an expansive drive off Mitchell Johnson into the palms of Ricky Ponting at second slip.
With the impetus back in Australia’s favour, Bollinger ripped through Pakistan’s tail with three wickets in four overs with the second new ball.
Misbah brought up his half century – which included a huge six off spinner Nathan Hauritz – as Pakistan just moved beyond the follow-on target before Johnson (3-36) bowled Saeed Ajmal to end the innings.
Seamer Mohammad Asif gave the tourists the perfect start when he removed Simon Katich caught behind for two.
New-ball partner Aamer bowled with aggression and control, firing a bouncer into Watson’s shoulder before mockingly blowing the opener a kiss in a heated exchange.
But Bollinger dismissed suggestions there was any malice in the confrontation between the two players.
“He (Aamer) bowls fast and fast bowlers are meant to be angry and have a bit to say and Watto batted well and stepped up,” said Bollinger.
“I think it’s the old opening bowler-opening batter situation.
“You know, you have a new ball in your hand and you get a bit of fire and you have no-one else to blow up at so you blow up at the batsman.”
Ponting survived a lbw referral before he pulled a short delivery from left-arm seamer Aamer into the hands of Salman Butt stationed on the deep square leg boundary.
And the 17-year-old collected his second wicket when he trapped Mike Hussey lbw for three to leave Australia precariously placed at 40-3.
But alongside Michael Clarke (21 not out), Watson played with circumspect and aggression, smashing seven boundaries and a six off Saeed Ajmal to ensure Australia maintain their dominance at the end of day’s play.
Misbah admitted Pakistan need to refine their approach to referrals after wasting two lbw appeals which looked not out.
“Unfortunately it’s not working well for us,” he said.
