Catharine Watters Davison, 63, a retired public information officer with the old Department of Health, Education and Welfare, died of pulmonary failure Sunday at the home of her daughter in Fairport, N.Y. She lived in Washington.

Mrs. Davison, who was born in Port Jervis, N.Y., graduated from Wells College in Aurora, N.Y. She then went to New York City, where she worked for MacMillan & Company, the publishing house. She moved to Washington in 1943 following her marriage to W. Phillips Davison.

In the 1960s, Mrs. Davison worked for the alumnae office of the National Cathedral School for Girls. From 1965 to 1967, she was employed in the publications office of the Library of Congress and also edited "Top of the World," a journal for children's librarians.

From 1968 until her retirement in 1980, she was an information officer at HEW.

Mrs. Davison's marriage ended in divorce.

Survivors include a daughter, Catharine Davison Wolf of Fairport; a son, Stowell Watters Davison of College Park; a brother, the Rev. Philip Watters of Mendham, N.J., a sister, Dorothy Watters Brand of Carmel, N.Y., and two grandsons.

The family suggests that expressions of sympathy be in the form of contributions to Wells College, Aurora, N.Y., or to the National Cathedral School for Girls, Washington, D.C.