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Abstract The High-Altitude Water Cherenkov (HAWC) Gamma-Ray Observatory, located on the side of the Sierra Negra volcano in Mexico, has been fully operational since 2015. The HAWC collaboration has recently significantly improved their extensive air shower reconstruction algorithms, which has notably advanced the observatory performance. The energy resolution for primary gamma rays with energies below 1 TeV was improved by including a noise-suppression algorithm. Corrections have also been made to systematic errors in direction fitting related to the detector and shower plane inclinations, $\mathcal{O}(0.°1)$biases in highly inclined showers, and enhancements to the core reconstruction. The angular resolution for gamma rays approaching the HAWC array from large zenith angles (>37°) has improved by a factor of 4 at the highest energies (>70 TeV) as compared to previous reconstructions. The inclusion of a lateral distribution function fit to the extensive air shower footprint on the array to separate gamma-ray primaries from cosmic-ray ones based on the resultingχ²values improved the background rejection performance at all inclinations. At large zenith angles, the improvement in significance is a factor of 4 compared to previous HAWC publications. These enhancements have been verified by observing the Crab Nebula, which is an overhead source for the HAWC Observatory. We show that the sensitivity to Crab-like point sources (E^−2.63) with locations overhead to 30° zenith is comparable to or less than 10% of the Crab Nebula’s flux between 2 and 50 TeV. Thanks to these improvements, HAWC can now detect more sources, including the Galactic center.