Naomi continued her career by starring in the Australian "Brides of Christ" (1991) co-starring Oscar-winners Russell Crowe and Brenda Fricker. In 1993, she worked with John Duigan again in "Wide Sargasso Sea" (1993) and director George Miller in "Gross Misconduct" (1993). "Tank Girl" (1995), in 1995, an adaptation of the comic book was a cult hit, starred Naomi as "Jet Girl", but it didn't fare well at the box-office and didn't do much for her career as a whole. Watts continued to take insignificant parts in movies including the much forgotten film "Children of the Corn: The Gathering" (1996).

It wasn't until David Lynch cast her in the critically acclaimed film "Mulholland Dr." (2001) that she began to become noticed. Her part as an aspiring actress showed her strong acting ability and wide range and earned her much respect, as much as to say by some that she was overlooked for a Oscar nomination that year. Stardom finally came to Naomi in the surprise hit "The Ring" (2002), which grossed over $100,000,000 at the box-office and starred Watts as a investigative reporter hunting down the truth behind several mysterious deaths seemingly caused by a video tape.

While the movie did not fare well with the critics, it launched her into the spotlight. In 2003, she starred in Alejandro González Iñárritu's "21 Grams" (2003) which earned her - what some say is a much overdue Oscar nomination and brought others to call her one of the best in her generation of actors. The same year, she was nominated for "21 Grams" (2003), Naomi was chosen to play "Ann Darrow" in director Peter Jackson's "King Kong" (2005) which took her to New Zealand for a five month shoot.

Watts completed her first comedy in "I Heart Huckabees" (2004) for director David O. Russell, playing a superficial spokes model - a break from her usual intense and dramatic roles she is known for. In 2005, she reprized her role as the protective-mother-reporter "Rachel Keller" in "The Ring Two" (2005). The movie, released in March, opened to $35,000,000 at the box office in the first weekend and established her as a box-office draw. Also in 2005, it was decided that her independent movie "Ellie Parker" (2001) would be re-released in late 2005 after its success at resurfacing at the Sundance Film Festival. The movie, which Naomi also produced, features her in the title role and is a bit biographical, but yet exaggerated take of the life of a struggling actress as she comes to Hollywood and encounters nightmares of the profession (it also features Watts' own beat-up Honda which she travels around in). In 2006, she starred with Edward Norton in "The Painted Veil" (2006).

In July of 2007, Naomi gave birth to a boy, Alexander Pete in Los Angeles with Liev Schreiber. Since then her career choices have gathered even more critical acclaim with starring roles roles in German director Michael Haneke's American remake of his thriller "Funny Games" (2007), David Cronenberg's "Eastern Promises" (2007), and the action-thriller, "The International" (2009), released in February 2009. In mid-2008, Watts announced she was expecting her second child with Schreiber and gave birth to another boy, Samuel Kai in New York on December 13.