It was harsh on Watford's England Under-21 goalkeeper Scott Loach who added to his growing reputation with a string of top-quality saves.
Loach denied Blackpool's Gary Taylor-Fletcher and Keith Southern inside the first ten minutes and stopped Southern again a moment before the home side made the breakthrough in the 16th minute, when Neal Eardley's deep cross beat Loach and Charlie Adam bundled home at the far post.
Watford had little of the play but hit back after 27 minutes when Heidar Helguson forced his way past Alex Baptiste on the by line, before cutting a cross back for on-loan Arsenal youngster Henri Lansbury to slot home.
Blackpool continued to test Loach in the second half not least through a dramatic 30-yard piledriver from Adam which the young keeper had to be at full-stretch to turn around the post.
But Watford also had their chances with home keeper Paul Rachubka twice having to be on his guard to deny Lansbury.
But it was still a shock when the Hornets found their way through with 12 minutes left care of a fantastic run and finish by another on-loan youngster Manchester United ace Tom Cleverley.
It looked like Ian Holloway's Blackpool would continue a poor run of home results which has seen them beaten by Barnsley and Sheffield Wednesday and dumped out of the FA Cup by Ipswich.
But there was relief for Holloway, who watched the match from the stand as a result of a two-game touchline ban, when Southern finally found his way past Loach in the 88th minute.
The keeper had already made one fine save but Southern latched on to the rebound and fired home from close range.
And justice was done when substitute Danny Nardiello hit a low cross in from the left which was turned in by Brett Ormerod.