Place the cubed watermelon in a blender or use an immersion blender to puree until completely smooth, about 1-2 minutes. Pour the purée into a large saucepan.
Add the sugar and lime zest to the watermelon purée in the saucepan, stirring well to combine. Place the saucepan over medium heat.
Heat the mixture, stirring constantly with a spatula, until the sugar dissolves completely and the mixture begins to simmer, about 5 minutes. Remove any foam that forms on the surface.
Reduce the heat to low and let the mixture gently simmer, stirring occasionally, until it thickens and reaches a gel-like consistency when tested on a spoon, approximately 20-25 minutes. The jam should have a glossy appearance and hold its shape when cooled slightly.
Remove the saucepan from heat and transfer the hot jam into sterilized jars, sealing immediately. Allow the jars to cool at room temperature before storing in the refrigerator.
Once cooled, label the jars and store them in the refrigerator for up to 2 weeks, or process in a water bath for longer shelf life.
