Retief Goosen, a two-time U.S. Open champion who thrives on fast greens, had another 68 on Friday to join Watson atop the leaderboard at the Quail Hollow Championship with 8-under 136.
Watson says he doesn't like attention, especially when the cameras come around.
"It's just because I play golf because I love the golf courses, I love to play, and now I've got all these strangers staring at me," Watson said. "I get nervous around people."
Woods seized control with a 55-foot birdie putt on the ninth hole and had a two-shot lead for most of the back nine until a sloppy finish, making bogeys on two of the last three holes for 72 that left him one shot behind.
"I didn't drive the ball particularly well today, didn't hit my irons as well as I'd like," Woods said. "I was hanging in there. If I could have posted 9 (under), I would have probably gotten the most out of that round I could have. It just didn't work out that way."
Former Masters Tournament champion Zach Johnson, one of eight players who had at least a share of the lead at one point, was the only player to reach 10-under par until he bogeyed the last three holes for 67 and joined the group at 7-under 137 that included Woods, Jim Furyk (66) and George McNeill (68).
Another shot back was Phil Mickelson, who had 71. He will play with Camilo Villegas, who had 67.
Masters Tournament champin Angel Cabrera shot 70-76 --146 and missed the cut, which fell at 144. Evans resident Vaughn Taylor (148) and Augusta native Charles Howell (150) suffered the same fate. Taylor shot 75 Friday, Howell 79.
EUROPEAN TOUR: In Girona, Spain, Thomas Levet had six birdies in 5-under-par 67 that gave him a two-shot lead after 36 holes of the Spanish Open.
Levet is at 13-under 131 on the Golf de Cata-lunya course, leads Soren Hansen, who had 70 on Friday.
John Daly, who is still serving a six-month suspension from the PGA Tour, had 72 and is 11 shots off the lead.