The good news is that ESRI is offering a quick and easy way for users to delineate watersheds using one of its online services in ArcGIS online. You can read about here:
The one downside is that the service is only available to users who have an ArcGIS organization account. An alternative is the functionality that is available in HydroDesktop (http://his.cuahsi.org/hydrodesktop.html). This software relies on an EPA service that for the most part works pretty well, but I’ve experienced some erroneous results from time to time when making a delineation. The upside is that the software will create a shapefile of your watershed of interest to you local disk which can be convenient.