Distinguished for his work in the field of insect physiology. Waterhouse developed a number of new histological techniques and by their application considerably extended knowledge of the processes of digestion, storage and excretion in insects.
In a series of studies of iron and copper distribution in Lucilia cuprina he has indicated functional differentiation of the epithelial cells in the midgut of insects. His investigations of keratin digestion in the intestine of the clothes moth clarified knowledge of this process.
In the field of applied biology he has made valuable contributions to the taxonomy, ecology, behaviour and control of the Australian blow-fly. During the war his work in the field of Medical Entomology materially influenced policies concerned with the control of malaria.