The 35-year-old American fired a three-under par 69 Sunday to finish 72 holes on eight-under 288 and take his second major title, the top prize of $1.62 million from a record $9 million purse and another green jacket.
"I never loved green so much," Watson said. "After giving away that jacket last year, I wanted it back."
Spieth and Sweden's Jonas Blixt shared second on 283 with 50-year-old Spaniard Miguel Angel Jimenez fourth on 284, Americans Rickie Fowler and Matt Kuchar sharing fifth on 286 and England's Lee Westwood seventh on 287.
Until a PGA triumph two months ago at Riviera, Watson had not won any title since defeating Louis Oosthuizen in a playoff to win the 2012 Masters, a slump he blamed this week on a hangover effect from his first major crown.
But Watson bounced back in style this week in the year's first major championship, becoming the 17th multiple winner of the Masters with his sixth career title.
"The first one for me, it's almost like I lucked into it," Watson said in comparing his Masters triumphs. "This one was a lot of hard work."
Spieth, a 20-year-old Texan, was trying to become the youngest champion in Masters history.
He also could have become the first golfer to win the Masters on his first try since Fuzzy Zoeller in 1979 and the youngest major winner since Tom Creavy took the 1931 PGA Championship.
"It hurts right now," Spieth said. "Even though it sits a little hard right now it was great and I'll be back.
"Didn't come out on top but I can take a lot of positives out there." Spieth owned a two-stroke lead on the eighth tee but fell behind after Watson closed the front nine birdie-birdie while Spieth made bogeys at both holes.
Spieth missed a five-foot par putt at the par-5 eighth while Watson tapped in for birdie to put them both on seven under. Watson curled in a tricky 12-foot birdie putt at the ninth while Spieth lipped out a five-foot par putt.
"Two two-stroke swings in a row, on this golf course, is very difficult to come back from," Spieth said. "Hats off to Bubba. When he's playing like that it's hard to catch him."
Watson fell to seven under with a bogey to begin the back nine, his lead trimmed to a single shot, but Amen Corner -- the course's famed 11th, 12th and 13th holes -- dampened Spieth's bid to rewrite the Masters record book.
Spieth found a slope at the par-3 12th and his ball rolled into Rae's Creek on the way to a bogey.
Watson drove the ball 360 yards at the par-5 13th on his way to a birdie that left him exiting Amen Corner on eight under, three ahead of Spieth and Blixt.
From there, Watson parred his way to the clubhouse, risking an approach through trees at the par-5 15th and a draw around tree limbs at 17 that paid off to help produce pars.
"I don't remember the last few holes," Watson said. "I just remember hanging on. I was just thinking, 'Make pars. Make pars.'"
Watson received a standing ovation from the crowd as he walked onto the 18th green and again moments later when he sank his final putt, after which he hugged caddie Ted Scott, picked up his two-year-old son Caleb and exchanged high-five hand slaps with the patrons around the green.
Watson became only the third multiple winner over the past 22 majors, joining Rory McIlroy and Phil Mickelson with two wins in that span.
Spieth fired a final-round 72 while Blixt shot 71, his fourth sub-par round.
Spieth was the first Masters rookie in the final duo on Sunday since 1995 and only the third since 1937.
Spieth, who began the round level with Watson on five under, was two strokes ahead on the fourth tee thanks to a birdie at the par-5 second and a bogey by Watson at the third.
Spieth made a spectacular birdie from a bunker at the par-3 fourth but Watson followed with a birdie to stay two strokes back. Spieth made bogey at the fifth, each birdied the par-3 sixth and Spieth birdied seven to lead by two.
Blixt, also making his Masters debut and just his third major start, could have been the first Swedish man to claim a major crown and Europe's first Masters winner since Spain's Jose Maria Olazabal in 1999.
World number one Tiger Woods, absent after surgery to ease a pinched nerve, kept his top ranking spot as those able to overtake him -- 2013 Masters champion Adam Scott, fellow Australian Jason Day and Sweden's Henrik Stenson -- finished well back.