Watrous is in southern Mora County, 1 mile (1.6 km) north of the San Miguel County line. Interstate 25 runs along the west side of the community. New Mexico State Road 161 runs through the center of town, connecting with I-25 at Exit 364 to the south and Exit 366 to the north. I-25 leads southwest 20 miles (32 km) to Las Vegas, New Mexico, and northeast 48 miles (77 km) to Springer.
According to the U.S. Census Bureau, the Watrous CDP has an area of 0.57 square miles (1.48 km2), of which 0.004 square miles (0.010 km2), or 0.70%, are water.[1] The Mora River runs along the northern edge of the community, flowing east toward the Canadian River in San Miguel County. The Sapello River, a tributary of the Mora, flows through the west side of town.