In the early 1980s, while teaching at the School of Shiatsu and Massage at Harbin Hot Springs, California, Harold Dull began adapting Zen Shiatsu for water. He experimented with floating people in the warm water natural springs, incorporating breathing patterns, meditative presence, and meridian stretches in sessions. He called this new form of aquatic bodywork Watsu, a contraction of Water Shiatsu. Dull discovered that Watsu induced deep relaxation, with profound physical and emotional effects.

Dull, with his background in creative arts, poetry, and English teaching, originally focused on Watsu as a meditative and nurturing practice, and emphasized "heart connection". In the 1980s Dull practiced and developed the techniques with various volunteers from the Harbin community, primarily massage therapists and yoga practitioners. Originally Watsu was developed for everybody – adolescents, young and old adults, pregnant women, athletes, and those suffering from stress. A wide variety of providers now offer Watsu, including psychologists, psychiatrists, physical therapists, massage therapists, and lay people.

By the late 1980s and early 1990s physical therapists and other healthcare providers began to use Watsu with their patients for diverse orthopedic and neurologic conditions. In those early years, there was some resistance to Watsu among those trained in conventional healthcare, primarily because of the roots in Shiatsu and the close physical contact. As increasing numbers of therapists have incorporated Watsu into their treatment programs, Watsu gained increasing acceptance as a form of aquatic therapy, and Watsu is now practiced a spas, clinics, health centers, and hospitals worldwide.