Leon Knight's 50th goal of his career midway through the second half saw the Seagulls repeat the manner of their victory against Gillingham on Boxing Day.
It stretched Brighton's unbeaten sequence over Christmas and the New Year to four matches - their best run of the season, but they had to win the hard way after Heidar Helguson gave Watford a 13th minute lead with his 13th of the campaign.
A defence-splitting pass by fellow Icelandic international Brynjar Gunnarsson found Helguson in space and he produced a superb right-foot finish into the far right corner.
Kerry Mayo equalised for Brighton three minutes later, with his first goal for over two years.
Paul Watson, making his first start since February got to the byline to cross. Gary Hart failed to connect at the near post, but Watford defender Lloyd Doyley dallied fatally as Mayo nipped in to score from close range.
Brighton manager Mark McGhee started with a 4-3-3 formation, but switched to 4-4-2 after the break.
Albion were much the better side in the second half as a triple substitution by McGhee brought almost instant reward.
England Under-21 defender Dan Harding was one of the three players McGhee introduced midway through the second half.
Harding played a part in Knight's 69th minute winner with virtually his first touch, providing a cross from Adam Virgo's pass which Knight tucked in with the outside of his right foot.
Knight, back in the starting line-up for the first time in four matches, almost added another in the closing stages with a 35-yard chip from a misplaced pass by Neil Cox which landed on the roof of the Watford net.
Second-half substitute Danny Webber, back from a dislocated shoulder, came closest to levelling for Watford in the closing stages with an angled shot which was fisted away by home keeper Michels Kuipers.