With the influx of European American settlers into Southern California in the 1870s, La Tajuata land was sold off and subdivided for smaller farms and homes, including a 220-acre parcel purchased by Charles H. Watts in 1886 for alfalfa and livestock farming. In those days each Tajuata farm had an artesian well. The arrival of the railroad spurred the development of the area, and in 1907 Watts was incorporated as a separate city, taking its name from the first railroad station, Watts Station that had been built in 1904 on 10 acres of land donated by the Watts family. The city voted to annex itself to Los Angeles in 1926.
Along with more European Americans, Mexican and Mexican American railroad workers ("traqueros") settled in the community. African-Americans came in later, and many of the men were Pullman car porters and other railroad workers. Schoolroom photos from 1909 and 1911 show only two or three black faces among the 30 or so children pictured. By 1914, a black realtor, Charles C. Leake, was doing business in the area.
Watts did not become predominantly black until the 1940s, as the Second Great Migration brought tens of thousands of migrants, mostly from Louisiana, Mississippi, Arkansas, and Texas, who left segregated Southern states in search of better opportunities in California. During World War II, the city built several large housing projects (including Nickerson Gardens, Jordan Downs, and Imperial Courts) for the thousands of new workers in war industries. By the early 1960s, these projects had become nearly 100 percent black, as whites moved on to new suburbs outside the central city. As industrial jobs disappeared from the area, the projects housed many more poor families than they had traditionally.
Longstanding resentment by Los Angeles's working-class black community over discriminatory treatment by police and inadequate public services (especially schools and hospitals) exploded on August 11, 1965, into what were commonly known as the Watts Riots. The event that precipitated the disturbances, the arrest of a black youth by the California Highway Patrol on drunk-driving charges, actually occurred outside Watts. Mobs did the most property damage in Watts in the turmoil.
Watts suffered further in the 1970s, as gangs gained strength and raised the level of violence in the neighborhood. Between 1989 and 2005, police reported more than 500 homicides in Watts, most of them gang-related and tied to wars over control of the lucrative illicit market created by illegal drugs. Four of Watts's influential gangs— Watts Cirkle City Piru Bloods, Grape Street Watts Crips, Bounty Hunter Watts Bloods, and PJ Watts Crips—formed a Peace Treaty agreement on April 26, 1992 following just over 4 years of peace talks which were initiated in July 1988 with the support of the local community and mosque, Masjid Al Rasul (where talks had be conducted and the treaty was finalized).
Twilight and Daude photos from the 1988 Peace Talks press conference were printed on the front pages of regional and local newspapers and their interviews with TV news crews were on every news channel. In the months and years to follow, Twilight would appear on National TV talk shows, radio talk shows, and speak at several college and university campuses. Both Twilight and Twelve received death threats due to misinterpretation of newspaper articles by their peers, many of whom would join the peace movement in the months and years to come.
After four years of peace talks, the Peace Treaty would be drafted and then agreed the day before the 1992 Los Angeles riots. The pact, supported by community-based education initiatives and private investments from prominent members of the community e.g. Jim Brown, continues to contribute to the decrease in gang-related death in Watts and the greater South Los Angeles area since 1992. Key hallmarks of the pact continue to influence life in Watts to date, with colors and territory having little to do with gang-related crime.
Beginning in the 1980s, due to gentrification, those African Americans who could leave Watts moved to other parts of South Los Angeles and suburban locations in the Antelope Valley, the Inland Empire, the San Gabriel Valley, Orange County, and the San Joaquin Valley. This process, which some call black flight, was part of the increasing gentrification of non-white inner-city communities implemented in the 1980s, in a journey typical of the larger American society. The black population in Watts has been replaced by successor migrants, primarily Hispanic immigrants of Mexican and Central American ancestry, as well as a smaller proportion of Ethiopian and Indian ancestry. This process of gentrification accelerated after the 1992 riots.
In addition, there has been a net migration of African Americans out of California to return to the South in a New Great Migration. From 1995–2000, California was a net loser of African-American residents. With new jobs, Southern states have attracted the most black college graduates since 1995.
Neighborhood leaders have begun a strategy to overcome Watts's reputation as a violence-prone and impoverished area. Special promotion has been given to the museums and art galleries in the area surrounding Watts Towers at 1765 East 107th St, near the Imperial Highway and suburb of Lynwood. This sculptural and architectural landmark has attracted many artists and professionals to the area. I Build the Tower, a feature-length documentary film about the Watts Towers and their creator, Simon Rodia, provides a history of Watts from the 1920s to the present and a record of the activities of the Watts Towers Arts Center.