||We develop a method to identify and determine the physical properties of stellar associations using Hubble Space Telescope (HST) NUV−U−B−V−I imaging of nearby galaxies from the Physics at High Angular Resolution in Nearby GalaxieS with the Hubble Space Telescope (PHANGS–HST) survey. We apply a watershed algorithm to density maps constructed from point source catalogues Gaussian smoothed to multiple physical scales from 8 to 64 pc. We develop our method on two galaxies that span the distance range in the PHANGS–HST sample: NGC 3351 (10 Mpc) and NGC 1566 (18 Mpc). We test our algorithm with different parameters such as the choice of detection band for the point source catalogue (NUV or V), source density image filtering methods, and absolute magnitude limits. We characterize the properties of the resulting multiscale associations, including sizes, number of tracer stars, number of associations, and photometry, as well as ages, masses, and reddening from spectral energy distribution fitting. Our method successfully identifies structures that occupy loci in the UBVI colour–colour diagram consistent with previously published catalogues of clusters and associations. The median ages of the associations increase from log(age/yr) = 6.6 to log(age/yr) = 6.9 as the spatial scale increases from 8 to 64 pc for both galaxies. We find that the youngest stellar associations, with ages <3 Myr, indeed closely trace H II regions in H α imaging, and that older associations are increasingly anticorrelated with the H α emission. Owing to our new method, the PHANGS–HST multiscale associations provide a far more complete census of recent star formation activity than found with previous cluster and compact association catalogues.