Do ahead: In a pitcher, stir together the tequila, agave, orange liqueur, and lime juice. Place in fridge to chill.
When ready to serve, place frozen watermelon cubes in a sturdy blender and blend until mostly smooth - small bits of fruit will remain.
Gently stir watermelon into the chilled tequila mixture. Divide crushed ice into 4 glasses and pour margaritas into glasses. Serve immediately.
Notes
Use frozen watermelon cubes instead of ice to keep your margaritas thick, slushy, and full of watermelon flavor without watering them down.
Mix the tequila, agave nectar, orange liqueur, and lime juice ahead of time and keep it chilled. This way, when it’s time to serve, you just need to blend in the frozen watermelon.
Choose a ripe, sweet watermelon for the best natural flavor. The sweeter your watermelon, the less extra sweetener you’ll need.
If you’d like to salt the rims, run a lime wedge around each glass and dip in kosher salt. When pouring, aim for the center of the glass so the drink doesn’t wash too much salt inside.
These margaritas are best served immediately for a frosty texture. If they start to melt, add a handful of crushed ice and give them a quick stir.
Store any leftover frozen watermelon cubes in a freezer-safe bag so you’re always ready for another batch.
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