Q: The message "Your Mac was unable to communicate with your Apple Watch" Keeps appearing when I try to set up my Watch to unlock my MacBook Pro

I've tried every step suggested below. Took ages to get the Mac to actually communicate with the watch in the first place but finally got there. Then tried to unlock. Got the whirly thing and it said unlocking with Apple Watch...then it asked for my password! Feature doesn't really seem to work  

Usually it just starts working after a day, after some random activity. Today it failed with my new Series 1 watch, reminiscent of the beta days.

The fix:

1. Forget the WiFi hotspot on the iPhone (makes the Mac and iWatch forget it too, over iCloud keychain!)
2. Disable bluetooth on the iPhone to break its connection with the watch
3. Re-join the same WiFi on the iPhone and Mac
4. Finally turn on bluetooth on the phone

The wifi settings will be propagated to the watch and now they're very likely all on the same network, maybe frequency too.

After these hoops, I was able to turn the checkbox on. And it works. At least until it doesn't

For troubleshooting, you can verify the watch's ability to join wifi by turning off bluetooth on the phone. Then look at the watch control center (swipe up from watch face). The green phone icon will turn into green cloud, if the watch is able to fall back to wifi. It tries to do that when it can't reach the phone over bluetooth.

Sometimes (don't know why) the watch forgets how to connect over wifi. Then auto unlock will fail too. The fix for that is the same procedure as above: Force the phone to forget the base station, then re-join and let the watch get the memo over bluetooth. Also make sure Handoff works reliably by visiting Mail.app on the watch. You should see the icon on the Mac Dock and iPhone lock screen.

I'm using Time Capsule "ac" network with a single SSID for 2.4/5 GHz, newest Apple hardware/software, good signals, and still it sometimes doesn't work. It's actually more reliable at the office, where there's a spotty 2.4 GHz 3rd party network. Seen these same problems since the feature was introduced in early betas, and GM is not fully reliable I learned today. Apple should provide honest troubleshooting instructions in its article and error messages. Great topic for Youtubers out there.

It keeps switching between working and not working for me. Super buggy.

i have just figured out the problem is!! its the option of using your phone to unlock your watch.you have to disable it and it will work like charm . on iPhone go to Watch app---->passcode---->switch off unlock with iPhone

its that simple and see it working.

the real problem that apple don't want you to use ur phone unlocking any ur mac yet, don't know why but it is worked for me give it a try who knows

What is MPB

I have a 2.4 ghz and 5 ghz network in my house with 2 different names.  Not only must the MacBook and Apple Watch be on the same network, but remember that to have the watch on the same network means your iPhone also has to be on the same network.  That fixed it for me.  Get your iPhone close and unlocked and on the same network.  Same with the computer and watch.  Then try again.

Watch app---->passcode---->switch off unlock with iPhone worked for me. Thanks!

My Watch can't independently join the same wifi network as my computer, because I'm at work, and our wifi network uses a login (which the Watch can't handle: About Bluetooth and Wi-Fi on Apple Watch - Apple Support ).

I wonder if this means that this feature simply won't work at work.

I also tried putting both my MacBook and my phone on the guest network at work, which requires a WPA2 password but not a username/password, and it still doesn't work. Stopping working on it for now before I blow a gasket.

Thanks! Turning unlock watch with iphone off finally made it work for the first time for me. Have always had this setting turned on even tho I don't think I've ever used it! Strange how none of apple's support docs mention turning this setting off.

I had the exact same issue! For me the wheel would spin for about 10 minutes until I received the same error message. I turned the Bluetooth on for my MacBook Pro and I put my iPhone into airplane mode to see what would happen and my watch connected within a few seconds. I don't know if my iPhone just needed to be out of the way for the initial connection or what but I haven't had a problem since. Try that!

That fixed the issue for me as well! Thank you for sharing!

Thanx a lot

that worked for me too!