During training camp, Watson competed to be the starting tight end against Crockett Gilmore, Nick Boyle, and Maxx Williams. Head coach John Harbaugh named Watson the backup tight end on the depth chart to begin the regular season, behind Nick Boyle. In Week 2, he recorded a season-high eight receptions for 91-yards during the Ravens' 21–10 victory against the Cleveland Browns. On December 17, 2017, Watson caught four passes for 74 receiving yards and caught a 33-yard touchdown pass during a 27–10 win at the Cleveland Browns in Week 15. Watson finished the 2017 season with 61 receptions for 522 receiving yards and four touchdowns in 16 games and 12 starts. On January 21, 2018, Watson was once again named a finalist for the Walter Payton Man of the Year Award, but it was instead awarded to J. J. Watt. Pro Football Focus gave Watson an overall grade of 60.7, which ranked 40th among all qualifying tight ends in 2017.