After a gruelling day of jousting atop a packed leaderboard under a hot sun that scorched the already devlish greens, the two Americans emerged tied at five-under par 211 yesterday.
Spieth had a two-under 70, while 35-year-old Watson, who had led by three overnight, settled for a 74.
In second place, a stroke behind, were American Matt Kuchar, who had a 68, and unheralded Swedish newcomer Jonas Blixt with a 71.
Spieth, who last year at age 19 became the youngest winner of a PGA Tour event since 1931, said that it had been the toughest of tests on an unforgiving layout.
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"We could tell early on that the greens were ridiculous. They were so fast that balls would pass the hole and come back a couple of feet," he said.
"But that is just the Masters. You can't let your focus go astray for a moment.
If he wins, Spieth would take the youngest Masters winner tag from Tiger Woods, who was 21 when he won his first major at Augusta National in 1997.
He would also be the first rookie to win the Masters since Fuzzy Zoeller in 1979 and just the third ever to do so.
Waston, who struggled with his putter all day said he was looking forward to playing with Spieth in Sunday's final pairing.
"That's my worst day, but I am still tied for the lead, so it's not too bad," said Watson.
Watson opened with a bogey, but on the back of an eagle at the second, he had a five-stroke lead while teeing off at the third.
But four holes later he had been reeled in by Blitz, Spieth and Danish veteran Thomas Bjorn, to be joined shortly after by Kuchar on five under.