The watch, once owned by Nora Keane of County Limerick, Ireland, was sold for $24,675, more than three times its estimated value, said Jon Baddeley, Bonhams & Butterfields auction house's marine collectibles expert.
Keane, who had emigrated to Harrisburg, Pa., was returning to the United States on the luxury liner's maiden voyage after a four-month visit to see her mother. It was damaged by water as she was rescued in lifeboat No. 10.
"It's been stopped ever since," Baddeley said. "We had a lot of interest from Ireland."
On the back of the watch was engraved the message: "To my dearest Nora, your visit to County Limerick warmed my heart. God bless and be with you on your return to Pennsylvania." It's signed: "Loving mother."
The Titanic sank in the North Atlantic on April 14 and 15, 1912, killing about 1,500 people.
The top sale price at the auction was $44,650 for the only known example of a 3rd class menu postcard, dated April 14, 1912. The card has a picture of the Titanic at the top, with the entire day's menu printed on it.
Baddeley said the items had belonged to a British private collector who wished to remain anonymous.