Sheffield United strengthened their position in the play-off zone after a battling victory at Vicarage Road.
The visitors were always too strong for the relegation-threatened home side although they could have found themselves two goals down early in the game.
"We had a nervous start but really when Paddy Kenny pulled off that save we seemed to get it together and I thought we were always in control of the game," said United boss Neil Warnock.
Kenny made a fine save to deny Scott Fitzgerald after 22 minutes when the Watford striker broke clear of the defence and sent a right-foot shot goalwards.
Kenny deflected the ball with his outstretched leg. Watford also went close when Neal Ardley met a Paul Devlin centre but headed wide of the target when presented with an unchallenged chance.
After early pressure Watford fell back and Jack Lester went close with a hooked attempt.
Lester was more successful after 41 minutes when Dries Boussatta floated in a corner where it was knocked down at the near post and Lester turned to lift the ball into the back of the net.
Watford huffed and puffed after the break and looked to have made the breakthrough thanks to their former skipper Robert Page. His diving header hit Kenny's crossbar as he attempted to clear a cross but happily for United the ball bounced out of play.
Kenny was well-positioned to take a couple of shots from Watford's new signing Paul Mayo.
"We seemed to concede too many free-kicks and present the initiative to United in the first half," said Watford boss Ray Lewington.
"We switched to 4-4-2 in an attempt to get behind a strong physical defence. The crowd were upset when I took off Scott Fitzgerald but one of the strikers had to be sacrificed in order to get width." United sealed their victory in the last minute when on-loan signing, substitute Izale McLeod, broke clear and set up Andy Gray for the second.