The population of the Watson Lake community averaged 1,545 people in 2003, the lowest it has been in ten years. The population of the Watson Lake area has fluctuated over the past decade, from a high of just over 1,800 in 1993 to the current low point. The Liard First Nation is an important segment of the population in the Watson Lake community. The 2001 Census shows just over 36 percent of the community's people identified themselves as First Nations people. This compares with 23 percent for the Yukon overall.
Watson Lake has had a slightly higher-than-average population movement from outside the Yukon. People who had moved from outside of the Yukon in the five years preceding the 2001 Census made up 18 percent of the Watson Lake population. The average for the Yukon as a whole was almost 16 percent. Most arrived from other provinces, with only a small number moving from outside Canada.
Information from the end of 2003 shows that the age structure of the Watson Lake population is very similar to that of the Yukon as a whole. Children aged 14 and under make up 22 percent of the total population compared to the Yukon-wide share of 20 percent. People over 65 are a further 6 percent, slightly below the Yukon proportion of 7 percent. Young people aged 15 to 24 are 14 percent of the total Watson Lake population, the same as in the Yukon as a whole. Working-age adults, from 25 to 64 years, make up 60 percent of the population, also the same proportion found in the overall Yukon population.
About 48 percent of the Watson Lake population is female, below the overall Yukon average of 50 percent.