Waternoose is a large obese gray monster, completely bald, with five eyes, and walks around on a set of six crab-like legs. He is always seen wearing a black tuxedo jacket over a white shirt, a red vest, and a black bow tie. When he was younger, he had an Afro-style hair and a chinless beard. A producer described him as a "cross between a spider and a crab."
Although Waternoose is an antagonist in this movie, he doesn't reveal his true colors until near the climax. Until then, he has a gentle, fatherly facade and is only driven to villainy out of desperation to keep Monsters, Inc. afloat in the midst of the energy crisis. He becomes more villainous as this drive and desperation strips away his morals and he is determined to not let anything stop what he thinks will be the best way for the company to keep going, never taking into account looking for other energy resources.
He is first shown at the very beginning of the film, informing Thaddeus Bile and the trainees about the dangers of a human child after Thaddeus has unsuccessfully attempted to frighten a simulation child in bed.
Later, when Sulley and Mike were carrying Boo, they attempt to alert Henry J. Waternoose, while he is attending a training session for new monsters. However, Waternoose asks Sulley to demonstrate his scare tactics, and when Sulley growls loudly, Boo reveals herself as a human child. Waternoose, taking Boo, promises to set things right, but instead reveals he is in on Randall's scheme, worried for the future of the company. He brings a door from the vault and pushes Sulley and Mike into it, and the door takes them to the Himalayas in Nepal. Sulley and Mike have a falling out. Sulley, only concerned about getting to Boo quickly scavenges parts from stockpiles from the Yeti, another exiled monster, and returns to the nearest village to use a door and return to Monsters, Inc.
Inside the secret lair, Mr. Waternoose accepts Randall's evil plan, albeit extremely grudgingly, as he had to exile Sulley, his best scarer, and watches as Randall and Fungus begin to test the scream extractor on Boo. Sulley intervenes at the last moment before the Scream Extractor gets to her mouth, dismantles the device, throws it at Mr. Waternoose and Randall, and rescues Boo. Mr. Waternoose then orders Randall to stop Sulley and finish him off, but Mike, who has followed Sulley back into the Monster World, accidentally gives away Randall's cloaking abilities, allowing Sulley to knock Randall off him by punching him in the face. After Sulley, Mike, and Boo escape, Mr. Waternoose tells Randall that they can't let any witnesses be exposed.
While Sulley and Mike lead Randall on a wild chase through a large chamber where thousands of doors to the human world are kept, Mr. Waternoose rallies the CDA to capture Sulley, Mike, and Boo under the pretense that they are the criminals responsible for the entire incident.
After the trio defeat Randall and return to Scare Floor F which is packed with CDA agents, Mike distracts the CDA by driving them away while Mr. Waternoose catches sight of Boo with Sulley and gives them chase to a simulation room.
Mr. Waternoose breaks into a room where Sulley has gone into and confronts Sulley, declaring that he'll kidnap a thousand children before he lets the company die. Knocking Sulley out of his way, he tries to grab Boo from the bed, but he instead grabs the simulation child. Just then, the wall goes up to reveal that Mike is behind the controls. Mike, who has recorded the confrontation between Mr. Waternoose and Sulley, plays back his favorite part to reveal Mr. Waternoose's nefarious scheme to the CDA as Waternoose watches in bewilderment. With this incriminating evidence, the CDA turn on Mr. Waternoose and arrest him. As he is being dragged away, Mr. Waternoose angrily blames Sulley for "destroying" Monsters, Inc. and making the energy crisis worse. It seems to be a lose-lose scenario when Sulley realizes how true it is, until Mike leads him to realize that laughter can put the company back in business, which it does, as laughter is proven to be ten times more powerful than screams. With this, Sulley is made the new CEO of Monsters, Inc. and it can be assumed that Waternoose regrets his actions when he hears about the company's rebound in prison.
He was going to appear in the prequel, but this was dropped at the last minute. After Mike and Sulley begin their new jobs at Monsters, Inc., they eventually work their way up to the position of the scaring team job that they have in the first film. This is revealed to the viewer when Mike's M.I. locker shows photos of them beginning this job and shaking hands with Mr. Waternoose. This is likely when the bond between him and Sulley began to grow. In the photo, he sports an afro and a chinless beard which he lost sometime before M.I.
Waternoose managed to escape from prison and used a door called "the Master Door" to go into children's rooms and scare them to the point that they were terrified of the monster comedians. When Sulley and Mike hear of Waternoose's escape, they decide to set a trap for him in Boo's room. Mike ruins the trap after falling onto a jaw trap.
Waternoose bursts through the door and sees Sulley and Mike. Waternoose tries to close the door but Sulley stops the door from closing and he and Mike follow him into a Fear Factory. Mike then decides to destroy the Master Door with an axe. Waternoose tries to stop him from destroying the door but misses when Mike dodges his attack. Waternoose then tries to convince Sulley to team up with him and in return, he will teach him how to use the Master Door.
Sulley refuses and Waternoose angrily grabs the axe and tries to kill Sulley with it. Sulley grabs the axe and throws Waternoose into the door. Waternoose feigns defeat to Sulley while secretly activating the Master Door. Waternoose then escapes through the door, leaving Sulley and Mike trapped in the Fear Factory. Waternoose was ultimately captured and put back in jail by the CDA.
Later, Waternoose and Randall would be freed by Sid Phillips and the three would together work on another revenge plot. They cut off the door power when Mike and Sulley return from a visit to Boo's and try to figure out how to go about their revenge. Randall turns down Waternoose's idea of a frame job and Sid just wants his reward of being given the door system patents to become rich in the human world.
Eventually, Celia and Boo escape when Boo activates her door and the three villains give chase while shutting Mike and Sulley out of it. Going through the neighbor's house, all three try to capture them, but Celia and Boo make it to the resident child's closet and bring the three right to a CDA task force waiting to take them into custody.
Mr. Waternoose was the sole animated character to be voiced by James Coburn before his death in 2002.
Although Waternoose ended up becoming involved in abducting Boo despite his claims of children being toxic to monsters, it is never made clear whether he knew children were not toxic, and thus lied about their danger to the monsters, or if he did truly believe they were toxic, but felt saving the company from bankruptcy was worth the risk of being poisoned by a child and potentially killed. Given that he holds Boo at one point in the movie, the former is most likely correct.
Though Waternoose states that the company had been in his family for three generations, any attempt to name him as "Henry J. Waternoose III" is an assumption that his name was passed down from grandfather to father to son. His father's and his grandfather's names are never stated and could have easily been unique names for each one.