The visitors could and should have won this match in the first half when they exposed Derby's soft centre.
George Burley brought on Adam Bolder to add some bite to his midfield in the second half and the tactic worked, although Derby left it late before Polish striker Grzegorz Rasiak scored his first goal in England.
Watford's Heidar Helguson had scored twice in the first 14 minutes and missed a great chance to complete a hat-trick as Derby's defence was pulled apart.
But former Watford striker Tommy Smith reduced the arrears six minutes before the break and Derby's improved second-half display was rewarded with a late equaliser.
But Derby will continue to hover around the mid-table region if they allow visiting teams the freedom to play through midfield.
Watford gratefully took advantage of Derby's hospitality and it was no surprise when Helguson headed in Neal Ardley's left-wing cross in the seventh minute.
He punished more weak defending with a well-struck left-foot shot from just inside the area and should have finished Derby off when he headed wide from eight yards in the 22nd minute.
But Derby raised their confidence when Smith swept the ball in from six yards after a Jeff Kenna cross was knocked down by Rasiak.
Both teams could have scored in the space of 60 seconds when Helguson had a low drive superbly saved by Lee Camp and then Richard Lee dived to his right to push away a Smith drive.
Watford appeared to have dowsed Derby's fire until Marco Reich delivered a dipping cross from the left and Rasiak flung himself forward to head into the bottom right-hand corner.