Williams is gunning for her 21st Grand Slam title and the world No 1 is on course to win all four major tournaments in a calendar year after securing??the Australian and French Open crowns earlier this season.
Watson, who is ranked 59th in the world, has never reached round four at the All England Club before but the 23-year-old is in no doubt she can topple the??all-conquering American.
“Do I believe I can beat her? Absolutely,” Watson said.
“There’s no point even going out there if you don’t believe you can win, because then there is no way I could possibly win anyway.
“I have to believe I can win from the first moment, from now. I’ll have to be very aggressive and push myself out of my comfort zone against her.”
Watson has never played Williams in a competitive match before, but after an inconsistent year she will take confidence from impressive opening wins against France’s Caroline Garcia and experienced Slovakian Daniela Hantuchova.
Friday’s clash with Williams will be last on Centre Court and the Briton intends to use the home crowd to maximum advantage.
She said: “I’ll do my homework tonight, I haven’t done any yet.
“It will be really good for me to have the home crowd behind me. It will help me.
“I don’t think people like being cheered against so I’ll use that to my advantage.”
Watson has been coached by Argentinian Diego Veronelli since December 2013 but has taken additional input from Greg Rusedski this year as she looks to bring more aggression to her game.
Agility, resilience and retrieval are the strengths Watson has traditionally relied on in the past but Andy Murray urged his compatriot to be brave against Williams.
“It’s probably the biggest test in tennis right now,” Murray said. “I saw a little bit of Serena’s match on Wednesday, she looked extremely motivated from the beginning.
“In some of the matches at the French Open, it didn’t appear that way, I don’t know if that was nerves or anything, but she looked pretty fired up the other day.
“So it’s going to be an extremely difficult match for Heather but she’s going to have the crowd with her.
“She has to try to use that to her advantage, try not to be intimidated and just go out there and give it a go.
“I’m not going to go into tactics or anything but she needs to really go for it, try not to let Serena dictate, and hopefully she can serve well.
“That will make a big difference.”