The 22-year-old England U21 international has put pen to paper on a three-year deal.
He is the Royals’ fourth signing in the last six days following the arrivals of Orlando Sa, Stephen Quinn and Paul McShane.
Bond, understudy to Brazil international Heurelho Gomes as Watford won promotion last season, was in Gareth Southgate’s England U21s squad for the recent European Championships.
Reading manager Steve Clarke told the club’s official website: “I’m delighted that we have managed to secure the signature of one of English football’s brightest young goalkeepers.
“Jonathan is at the stage of his career where he needs a new challenge and the opportunity to establish himself as first-choice goalkeeper.
“He has all the attributes needed to reach the very top and, with the help of Dave Beasant, it is our aim to get him there.
“With Jonathan joining Stuart Moore in our ranks we believe that our goalkeeping department is starting to look very strong again.
“It is my intention to bring one more experienced goalkeeper to the club to complement the young talent that we now have.”