According to family tradition, Jacob Watts was a son of John Watts, a colonial British interpreter and trader to the Cherokee Indians by his first wife Josephine "Joppe" (Stuart) Watts. Jacob's father, John Watts, also had children by a Native American woman named Oousta "White Owl" (sister of Reyetaeh "Old Tassel"), by whom he fathered the Cherokee chief John "Young Tassel" Watts (Kunokeski), and Wurteh Watts (mother of Sequoyah), who were half-siblings of Jacob Watts.

Jacob Watts married Anne Harkey, a daughter of German settlers who had moved from Pennsylvania to North Carolina. Jacob and Anne were the parents of:

David Watts (1782-1855), m. Margaret Simpkins
John Watts (1784-1850), m. Susan Cagle
Elizabeth Watts (1786-1859), m. Zachariah Samuel Hawkins
Nancy Watts (1788-1840), m. Elias Horn
Joseph Watts (1790-1870), m. Nancy Ledbetter
Sampson Watts (1792-1874), m. Harriet Stogner
Jacob Zachariah Watts (1793-1868), m. Emily Ross
Margaret "Peggy" Watts (1793-1879), m. Asa Asher Mullins
Rebecca Watts (1795-1872), m. Eli Watson
Martha "Patsy" Watts (1797-1880), m. Joseph Johnson
Andrew Watts (1799-1860), m. Barbara Kestler

Jacob Watts was a gold-prospector in Montgomery Co., North Carolina, who in 1806 was employed by the North Carolina Gold Mine Company along with his mining partner Elias Horn.

Jacob Watts' granddaughter Louranna (Horn) Sparks, stated in an affidavit dated May 13, 1895, "that Jake Watts, her grandfather, stole Elias Horn's wife [Catherine Cagle], and that Elias Horn afterward married Jake Watts' daughter [Nancy A. Watts] - her mother. That she is a daughter of Elias Horn by his last wife, the daughter of Jake Watts."

It is not known if Jacob Watts died in Montgomery Co., North Carolina, or if he accompanied the rest of his family when his first wife Anne and her children moved to Habersham Co., Georgia, where Anne was living as a single woman with children on the 1820 census.