The U's had hoped to extend Massey's initial month-long stay, which expires after Saturday's trip to Yeovil, with the 19-year-old also open to prolonging his time with the League One club.
But a striker shortage at Vicarage Road due to Marvin Sordell's January sale to Bolton and a hamstring injury to Troy Deeney has left Hornets boss Sean Dyche light in attacking options.
Massey's recall was subsequently activated on Thursday afternoon, although Colchester boss John Ward is open to seeing the teenager return to Essex in the foreseeable future.
He told United's official website: "We've enjoyed having Gavin here at the football club in the past month.
"We've told Watford that if their injury situation settles down then we would be pleased to welcome him back in the future, and both Sean and Gavin were grateful for that opportunity still being there."