Watters tucked in the opener, but the Reds were pegged back when Josh Kay followed up his saved penalty.
Sam Hird headed the Bluebirds in front, but Watters’ second of the game levelled for the Reds.
Tom Nichols showed great composure to slot in a late penalty, and Watters scored his third in added time to secure the match ball, and three points for Crawley.
Tyler Frost, Sam Matthews and Max Watters all returned to the starting line-up, as fans returned to the People’s Pension Stadium for the first time since March.
It was Crawley who found the opening goal, when a good spell of play saw Sam Matthews slide the ball through to the in-form Max Watters, who, under pressure, showed great composure to roll the ball underneath the onrushing Joel Dixon, giving the Reds the lead on 22 minutes.
Barrow had a great chance to equalise soon after when, following a lengthy discussion with the referee and his linesman, a penalty was awarded for a foul on Connor Brown by Tyler Frost, despite initially awarding a free-kick. Josh Kay stepped up, and despite Glenn Morris saving the initial penalty attempt, Kay followed in to level for the Bluebirds in the 33rd minute.
Crawley looked for the instant reply and were somehow kept out when Watters’ low drive was kept out by Dixon, with Tom Nichols just unable to squeeze the ball in from close range.
Early in the second-half, Barrow came from behind, as Kay’s corner towards the near post was glanced over Morris and in by Sam Hird, as the Bluebirds turned the game on its head, in the 49th minute.
Crawley continued to press, and found the leveller, as Nichols’ looping header came off the bar and fell for Watters, who slotted in his second of the game at close range in the 59th minute.
It soon got worse for Barrow, as Brown was dismissed for a poor challenge on Tom Dallison, as the visitors went down to ten men on the 71st minute.
Crawley were given the chance to win it late on when Ashley Nadesan was caught in the box by Matt Platt. Nichols stepped up, and sent Dixon the wrong way, slotting into the bottom corner to give Crawley the lead in the 78th minute.
The Reds sealed the deal late on, when Nadesan darted through on goal on the counter-attack and was unselfish, sliding the ball across to Watters, who stroked into an open goal to secure his hattrick and all 3 points for the Reds in the 93rd minute.
Crawley Town: Morris, Dallison (Davies 69’), Powell, Frost (Ferguson 63’), Nichols, Sesay, Tunnicliffe, Matthews (Nadesan 63’), Craig, Watters, Hessenthaler
Barrow: Dixon, Brown, J Taylor (Sea 85’), Platt, Hird, Quigley, Kay (C. Taylor 75’), Beadling, Wilson (Brough 85’), Reid (Angus 57’), James (Biggins 75’)