1. Zest lime, then cut off and discard outer white membrane. Chop remaining lime into small pieces, reserving juices.
2. Combine lime zest and pieces with their juices, sugar, and 1/4 cup water in a small saucepan. Cook over high heat until boiling. Let cool slightly. Pour lime dressing over watermelon in a bowl and mix to combine.
Note: Nutritional analysis is per 1 1/2-cup serving.