Reports claimed the device was due for release in mid-2022 and would feature multiple cameras.
But a senior Facebook executive said the smartwatch was in only its early stages - and may never be released to the public.
"We're investing in technologies across the board... research doesn't always lead to product development," he said.
The watch's existence was revealed by technology news website the Verge, which cited anonymous sources familiar with its development.
It would feature a detachable display with two cameras that would integrate with Facebook networks, including Instagram, the site reported.
"It's part of Facebook CEO Mark Zuckerberg's plan to build more consumer devices that circumvent Apple and Google, the two dominant mobile-phone platform creators that largely control Facebook's ability to reach people," the Verge said.
It also reported the device was set to be a controller, linking to planned augmented-reality glasses, which Facebook has made no secret of developing.
And Facebook Reality Labs vice-president Andrew Bosworth lent that version of the product credence, while dismissing the idea of a mainstream smartwatch.
"We've said we want AR glasses to be truly useful... to make that interaction feel more natural and intuitive," he tweeted.
"This includes research like EMG [electromyography] , haptics, adaptive interfaces that could come together in a wrist-based form factor."
"We'll share more when we're ready."
Facebook announced a similar "controller" idea in March, saying its researchers had designed a wristband that could detect hand movements based on nerve signals.
The technology giant is a powerful force in virtual reality, through its range of Oculus headsets, which have pushed forward low-cost VR that does not always require external powerful computers.
But it has also been criticised within the VR community for requiring a Facebook account to use its newer products.