The 2010 Travelers champion was at 10-under 130. Reed and Harrington were at 8 under after both shot 66s in the second round. Four players including 2007 champion Hunter Mahan were tied for fourth at 7 under.
Charley Hoffman, who held the first-round lead after a 61 on Thursday, followed that with a 73 in a round that included three bogeys and a double-bogey.
One week after winning the U.S. Open at Merion, Justin Rose was tied for 12th at 5 under.
Watson, whose last victory came in the 2012 Masters, has played well in this event often. He's finished in the top 15 four times in six previous starts, including that win in 2010 his first on the PGA Tour and a second-place finish last year.
"The tee shots set up well for me. I like the way they look," Watson said. "There's about two tee shots on the whole course that are really tough for me. Other than that, the course sets up well for me."
With two top-10 finishes and six top-25s this season, Watson is currently 57th in FedEx Cup points. He finished tied for 32nd in last week's U.S. Open.
Glenview, Ill. • Craig Stadler birdied five of his first 11 holes to jump into a share of the lead with Duffy Waldorf and Bernhard Langer at 5-under-par 67 in the rain-delayed Encompass Championship at North Shore Country Club.
There were 23 players left on the course when play on the 54-hole tournament was suspended by darkness.
Rogers, Ark. • Mika Miyazato birdied six of 10 holes in the middle of her round to shoot a 6-under 65 and earn the first-round lead at LPGA Tour's NW Arkansas Championship.
Miyazato finished in a tie for second at the event last year, missing a 15-foot birdie putt on the final hole to finish a stroke back of winner Ai Miyazato.
Bubba Watson -10
Patrick Reed -8
Padraig Harrington -8
Four tied at -7
Daniel Summerhays +1