Waterhouse was the fifth child of the Rev. John Waterhouse, a
Yorkshire Methodist, and was born in
London. He attended
Kingswood School in
Bath from 1832 until 1835 when he was apprenticed to a printer. The Waterhouse family migrated to Australia in 1839 when John Waterhouse became general superintendent of the Wesleyan Methodist Mission in Australia. When the family settled in
Hobart a printing company was bought and Jabez managed it. The following year Jabez became a local preacher ministering to convicts. He became a probationer in 1842 and, after studying at Richmond Theological College, he was ordained in the Methodist chapel,
Spitalfields. On 13 August 1847 Waterhouse married Maria Augusta,
née Bode, at
Windsor, Berkshire. ==Australian ministry==