Darius Henderson made it four goals in two games with one in each half for the visitors and Jimmy Floyd Hasselbaink gave home supporters hope with his first goal for the club.
Cardiff showed one change from the team that drew at Plymouth with Robbie Fowler starting in place of Peter Whittingham.
Neat passing down the right flank by Gavin Rae and Chris Gunter in the 11th minute ended with the full-back sending a cross-shot whistling over the bar and one minute later a 25-yard shot on the run by Paul Parry was pushed away by Watford keeper Mart Poom.
The visitors took the lead in the 17th minute when Ross Turnbull failed to find distance with a punch after an Adam Johnson free-kick.
With Turnbull on the deck after colliding with one of his own players, the ball rolled towards an open goal and Henderson slid in to make sure.
Hasselbaink had a great chance to equalise in the 36th minute when he latched on to a poor back-pass from Jay DeMerit but he ran wide and Poom was able to block.
DeMerit sliced the ball over his own bar in the 50th minute and from the corner Gunter lashed a shot that flew over the crossbar.
A poor cross-field ball by Roger Johnson put City in trouble but Turnbull beat away Henderson's shot.
In the 61st minute, the Bluebirds were level when the ball broke to Hasselbaink from Trevor Sinclair and he curled his shot into the net from 20 yards.
The Bluebirds discovered a new belief and Watford were pushed back on the defensive for long periods and Hasselbaink brought a great save from Poom in the 72nd minute.
Two minutes later, Sinclair had only Poom to beat but the Hornets keeper saved with his legs.
Watford regained the lead in the 77th minute when City cleared a corner but left Henderson onside and he easily beat Turnbull from close-range.
Steve Thompson went on in the closing minutes, but it was Watford's Lloyd Doyley who went closest in the final minute.