Watermelon (Citrullus lanatus L.) is a widely popular vegetable fruit crop for human consumption. Soil salinity is among the most critical problems for agricultural production, food security, and sustainability. The transcriptomic and the primary molecular mechanisms that underlie the salt-induced responses in watermelon plants remain uncertain. In this study, the photosynthetic efficiency of photosystem II, free amino acids, and transcriptome profiles of watermelon seedlings exposed to short-term salt stress (300 mM NaCl) were analyzed to identify the genes and pathways associated with response to salt stress. We observed that the maximal photochemical efficiency of photosystem II decreased in salt-stressed plants. Most free amino acids in the leaves of salt-stressed plants increased many folds, while the percent distribution of glutamate and glutamine relative to the amino acid pool decreased. Transcriptome analysis revealed 7622 differentially expressed genes (DEGs) under salt stress, of which 4055 were up-regulated. The GO analysis showed that the molecular function term “transcription factor (TF) activity” was enriched. The assembled transcriptome demonstrated up-regulation of 240 and down-regulation of 194 differentially expressed TFs, of which the members of ERF, WRKY, NAC bHLH, and MYB-related families were over-represented. The functional significance of DEGs associated with endocytosis, amino acid metabolism, nitrogen metabolism, photosynthesis, and hormonal pathways in response to salt stress are discussed. The findings from this study provide novel insights into the salt tolerance mechanism in watermelon.