Ridden by Martin Garcia, Coil was sent off as the 3-1 second choice behind 3-2 favorite Shackleford in the eight-horse field. Local runner Pants On Fire was the 4-1 third pick and his stablemate Belmont Stakes winner Ruler On Ice was 6-1.
Illinois Derby champ Joe Vann set the pace from the start with Shackleford pressing him from second. Coil, with blinkers off for the first time, was last.
Joe Vann still had the lead with a half-mile to run, Shackleford and rider Jesus Castanon drew even from the outside and took the lead on the far turn. The Preakness winner appeared to take control of the race around the final turn as he drove past tiring runners into the stretch.
Coil was ranging up from the outside as the field entered the stretch and quickly moved into second. With a furlong to go Coil caught Shackleford and the pair battled to the finish.
Baffert's colt edged past the favorite right before the wire to post a neck victory. Ruler On Ice got up to finish third followed by J J's Lucky Train, Pants On Fire, Joe Vann, Astrology and Concealed Identity.
Owned by Watson, Pegram and Weitman, Coil stopped the timer at 1:48.20 for the 44th Haskell.
"What he did today, it was incredible," Baffert said. "He looked like Point Given." Point Given won the Haskell in 2001 and sired this year's winner.
Along with Point Given, Baffert won the Haskell last year with Lookin At Lucky, Roman Ruler (2005) and War Emblem (2002). Garcia was aboard last year's champ.
Coil notched his biggest payday Sunday, putting $600,000 into the bank. In six career starts the three-year-old has four wins and $748,560. In June the chestnut colt won the Affirmed Handicap at Hollywood Park and followed with a second in the track's Swaps Stakes.
"He's not a massive horse," Baffert said earlier. "I think he's getting better as he gets older."
The Haskell was Coil's first start on a conventional dirt track.
Coil returned $8.40, $4.80 and $3.60. Shackleford paid $3.20 and $2.60, and Ruler On Ice paid $4.00 to show.