By Mark Lamport-Stokes
With American Dustin Johnson having earlier been eliminated from the playoff in stunning fashion after being handed a two-stroke penalty, Kaymer went on to clinch the prized Wanamaker Trophy over three extra holes at Whistling Straits.
"The majors, they are the biggest tournaments we play. It's cool to see my name (on the trophy) next to Jack Nicklaus, Arnold Palmer and all those guys. It will take me a while to realize what has happened."
Kaymer's victory made him the sixth first-time winner in the last seven majors with Phil Mickelson's emotional victory at the U.S. Masters in April the sole exception.
Watson holed a three-foot birdie putt at the first playoff hole, the par-four 10th, but Kaymer immediately responded by sinking a 15-footer to birdie the treacherous 223-yard 17th.
The German then sealed victory in the year's final major with a bogey at the par-four 18th after both players found the right rough off the tee.
After tapping in from less than two feet, the Dusseldorf native removed his cap to acknowledge the roars from the crowd crammed around the green before shaking hands with Watson.
"I just hope with this win, I can make golf more popular in Germany," Kaymer said after earning a check for $1.35 million. "Bernhard Langer obviously inspired me when I was a kid, and I hope that I can now inspire teenagers as well."
Watson's disappointment at finishing second was swiftly erased when he learned he had qualified for the U.S. Ryder Cup team for the first time.
"I made the Ryder Cup, so that's all I care about," the 31-year-old said. "I'm happy as can be."
Johnson had finished level with Kaymer and Watson after the 72 regulation holes on 11-under-par 277 but was adjudged by officials to have grounded his club in a bunker to the right of the fairway before playing his second shot at the 18th.
"Walking up there and seeing the shot, it never once crossed my mind I was in a sand trap," a stunned Johnson said in a television interview. "I just thought I was on a piece of dirt that the crowd had trampled down."
Johnson had birdied 16 and 17 to lead the tournament by one shot playing the last but he missed an eight-foot par putt to bogey the hole for a one-under 71, which was then adjusted to a 73.
Kaymer, who sank a 15-foot par putt at the last for a 70, and Watson, after firing a 68, went into the playoff with each of them seeking a maiden major victory.
It was day to forget, though, for American Nick Watney who led by three strokes overnight but double-bogeyed the first and tripled-bogeyed the seventh on the way to a nightmare 81 and a tie for 18th at four under.
Phil Mickelson, winner of the 2005 PGA Championship, fired a best-of-the-day 67 to share 12th place at six under, four better than world number Tiger Woods, who again struggled with his driving on the way to a 73.
(Editing by Peter Rutherford)