Allene oxide synthase (AOS) and hydroperoxide lyase (HPL), members of the CYP74 gene family, are branches of the oxylipin pathway and play vital roles in plant responses to a number of stresses. In this study, four HPL genes and one AOS gene were identified in the watermelon genome, which were clustered into three subfamilies (CYP74A, CYP74B and CYP74C). Sequence analysis revealed that most HPL and AOS proteins from various plants contain representative domains, including Helix-I region, Helix-K region (ExxR) and Heme-binding domain. A number of development-, stress-, and hormone-related cis-elements were found in the promoter regions of the ClAOS and ClHPL genes, and the detected ClAOS and ClHPL genes were differentially expressed in different tissues and fruit development stages, as well as in response to various hormones. In addition, red light could enhance the expression of ClAOS in root-knot nematode-infected leaves and roots of watermelon, implying that ClAOS might play a primary role in red light-induced resistance against root-knot nematodes. These findings lay a foundation for understanding the specific function of CYP74 genes in watermelon.