The plant compact and dwarf growth habit is an important agronomic trait when breeding watermelon (Citrullus lanatus) cultivars because of their reduced vine length, high-density planting, and better land utilization; however, the genetic basis of the dwarf growth habit is not well-known. In this study, the plant population of six generations, P1, P2, F1, F2, BC1P1, and BC1P2, were studied. A genetic segregation analysis demonstrated that dwarfism is mainly controlled by a single recessive Cldw gene. Furthermore, whole-genome sequencing of two distinct watermelon cultivars, W1-1 (P1) and 812 (P2), was performed and preliminarily mapped through a bulked segregant analysis of F2 individuals that revealed the Cldw gene locus on chromosome 9. Two candidate genes, Cla015407 and Cla015408, were discovered at the delimited region of 43.2 kb by fine mapping, and gene annotation exposed that the Cla015407 gene encodes gibberellic acid 3β-hydroxylase protein. In addition, a comparative analysis of gene sequence and cultivars sequences across the reference genome of watermelon revealed the splice site mutation in the intron region of the Cldw gene in dwarf-type cultivar 812. The quantitative real-time polymerase chain reaction exhibited a significantly higher expression of the Cla015407 gene in cultivar W1-1 compared with 812. There was no significant difference in the vine length of both cultivars after gibberellic acid treatment. In brief, our fine mapping demonstrated that Cla015407 is a candidate gene controlling dwarfism of watermelon plants.