As with many of the lyrics to the songs on this album, the words to "Watchtower" contain possible Biblical and apocalyptic references, and are hard to explain with any degree of certainty. Taken literally, the song concerns a conversation between two people, a "joker" and a "thief", on the difficulties of getting by in life ("There's too much confusion;" There are many here among us who feel that life is but a joke"). At the end of the song, the pair either approach a watchtower (manned by princes and servants), or the watchtower (which the joker and thief are presumably in) is approached by two other riders. This point is difficult to ascertain as the viewpoint of the song switches abruptly.
The song has been covered by many artists, including Richie Havens, XTC, the Indigo Girls, U2, TSOL, and the Dave Matthews Band, but innovative guitarist Jimi Hendrix recorded what is considered by many to be the most notable cover, one which has overshadowed Dylan's own performance. Hendrix rearranged the song to include several evocative and intricate electric guitar solos, and recorded the song with stunning energy on his album Electric Ladyland in 1968. Dylan's subsequent live performances of his own song have also used an electric guitar and been closer to Hendrix's arrangement than his studio version; that said, however, it must be noted that most of Dylan's contemporary live performances use electric guitars, and he typically re-arranges all his songs in concert.