She began performing with a local theater group as a teenager. Alberta Watson then headed to the United States, living in New York and then moving to Los Angeles, where she made several films including the cult horror classic The Keep (1983) with Scott Glenn and the TV movie Women of Valor (1986)(TV) with Susan Sarandon and Kristy McNichol.

After returning to the East Coast, Watson took a chance on a low-budget independent film with then-novice director David O. Russell. Spanking the Monkey (1994) won the Sundance Film Festival Audience Award, multiple Independent Spirit Awards, and dozens of rave reviews for Watson's performance as a depressed, addicted mother who has an affair with her own son, played by "Saving Private Ryan" star Jeremy Davies.

The next year, Watson went on to play the far more stable mother to a teenage computer genius in the box office smash Hackers (1995), and then the wife of mobster John Gotti in the Emmy nominated television movie of the same name. Watson returned to Toronto and continued to seek out interesting roles in independent film, a quest which led her to work with fledgling director 'Colleen Murphy' on 1996's Shoemaker (1996).

While the film was not widely released in North America, Watson's performance did not go unnoticed - she received a second Genie nomination, this time in the Lead Actress category. The following year, she won critical praise for another independent film, Atom Egoyan's haunting _Sweet Hereafter (1997), in which she played the mother of a child killed in a tragic accident. The film boasted an exceptional cast including Ian Holm and Sarah Polley, received the Grand Prize of the Jury at the Cannes Film Festival and went on to earn both Academy Award and Genie nominations.

More recently, she made The Life Before This (1999), with Stephen Rea, Sarah Polley and Catherine O'Hara which debuted at the Toronto Film Festival in September 1999. Tart (2001), a movie made with Melanie Griffith and Dominique Swain, was released in 2001. In the same year she also completed Hedwig and the Angry Inch (2001) and Guilt by Association (2001)(TV), in which she plays Oscar-winner Mercedes Ruehl's sister. Other films due to be released this year include The Wild Dogs (2002), set in Romania, in which she plays a wealthy ambassador's wife who is drawn to helping handicapped children and Irish Eyes (2002), a tale of two brothers from a poor Irish family. When she is not on location, Watson lives in Toronto with her two cats and two dogs.