Peter Watson was the son of William George Watson, later Sir George Watson, and was the youngest of three children - his brother Norman was born in 1897 and sister Florence in 1894. He was educated at Lockers Park School, Eton College and St John's College, Oxford.
Watson was an avid art collector acquiring works by such artists as Miró, Klee, and Pablo Picasso, which were displayed in his Paris apartment in the 1930s. He was the principal benefactor of the Institute of Contemporary Arts in London and also provided financial assistance to English and Irish painters including Francis Bacon, Lucian Freud and John Craxton.
In 1930, society photographer, artist and set designer Sir Cecil Beaton began a lifelong obsession with Watson, though the two never became lovers.
Watson was found mysteriously drowned in his bath on 3 May 1956. Some have suggested that he was murdered by his young American lover, Norman Fowler (from whom Francis Bacon stole #300 to go gambling). Fowler inherited the bulk of Watson's estate and died 14 years later in the West Indies; he was also found drowned in his bathtub.
Peter Watson was said to be the love of Cecil Beaton’s life, though they were never lovers.
In 1940 Watson provided funding for Cyril Connolly's Horizon and became its arts editor. Watson was art editor for the magazine between 1940 and 1949. He rarely contributed articles, but gave many opportunities for his friends to have their pictures reproduced in the magazine, and also encouraged Horizon to look beyond British Art, particularly to Paris.
Watson commissioned articles on artists barely known at the time in England, such as Balthus, Morandi and Klee. He persuaded Picasso's dealer, Daniel Kahnweiler, to comment on the contemporary art market; and he also got Michel Leiris to write about Giacometti.
One of Watson's lovers was the American male prostitute and socialite Denham Fouts, whom he continued to support even after they separated as a result of Fouts's drug addiction.
Watson was found drowned in his bath. Some have suggested that he was murdered by his young American lover, Norman Fowler (1927 - March 23, 1971). Fowler inherited the bulk of Watson's estate and died 14 years later in the West Indies; he was also found drowned in his bathtub.