- Purée watermelon in a blender or food processor until liquid. Strain through a fine-mesh sieve, pressing with back of spoon to help extract juice. Set juice aside.
- In a small pot over medium heat, combine sugar and water. Cook until syrup comes to a boil, then add jalapeño. Let steep for 1 hour. Strain through fine-mesh sieve.
- In a quart-size container, add 1½ cups of the watermelon juice, then fill to 1 quart with jalapeño syrup.
- Fill four 12-ounce glasses with finely shaved ice, then top with watermelon syrup. Serve immediately.