Which 2001 film by David Lynch starred Naomi Watts and was nominated for Best Director?

The 2001 David Lynch film starring Naomi Watts that was nominated for Best Director is Mulholland Drive.

Mulholland Drive is a surreal mystery and neo-noir film set largely in Los Angeles. Watts plays Betty Elms, an aspiring actor who meets an amnesiac woman, played by Laura Harring, after a car crash. The film's fragmented structure and shifting identities have made its meaning a subject of continuing interpretation.

Lynch originally developed the project as a television pilot for ABC. After the network rejected the pilot, French company StudioCanal helped finance additional filming, allowing Lynch to reshape the material into a feature film with a new ending.

The film earned Lynch an Academy Award nomination for Best Director at the 74th Academy Awards. He also shared the Best Director prize at Cannes with Joel Coen. Blue Velvet was another Lynch film, but it was released in 1986; Lost Highway and Inland Empire came out in 1997 and 2006 respectively.