The recall involves 303 styles of MZB children's "Light Up" watches.
The case-back of the watches can detach and expose the interior to water, posing a risk of skin irritation, redness, rashes and even chemical burns.
There have been 11 reports of skin irritations or chemical burns, six of which required medical treatment.
The watches were sold at Kmart, Kohl's, Walmart and other retailers nationwide from October 2012 through this past June.
An additional 58,000 were sold in Canada.
Consumers should take the watches away from children and can contact MZB toll free at (888) 770-7085 from 8 a.m. to 7 p.m. ET Monday through Friday for more information.