Despite making a host of changes - five of them enforced through international call-ups and suspensions - Sam Allardyce's men had a firm grip on proceedings by the breakthrough goals from Jared Borgetti and Stelios Giannakopoulos.
The Hornets came out for the second half with more purpose, but the Bolton defence withstood their best attacking efforts before a fine 25-yard strike from Ricardo Vaz Te saw them through to round four.
The visitors were in the ascendancy from the opening whistle, with Watford's offside trap struggling to cope with Bolton's passing and movement and it was no surprise when they took the lead after 11 minutes.
Malky Mackay made a hash of clearing a Ricardo Gardner cross from the left and the ball fell nicely for Mexico international Borgetti to strike home a left-foot shot on the turn for around 15 yards.
The goal seemed to spark the home side into life and Darius Henderson wasn't too far wide with a right-foot shot after Anthony McNamee had cleverly jinked in between two defenders.
Henderson also had a header from a McNamee corner saved by Ian Walker, but Bolton were still threatening in attack and thought they had doubled their lead when Vaz Te squeezed the ball home at the far post following good work by Giannakopoulos.
That goal was ruled out for offside but Watford were not so fortunate soon after when Vaz Te was played in down the left and his low cross was left by Hidetoshi Nakata for Giannakopoulos, who slammed the ball into the roof of the net.
The Hornets came out in a far more positive frame of mind after the restart and it took a good save from Walker to prevent Marlon King pulling one back with a well struck shot on the turn.
The Hornets still kept pressing but that was to be the best of their chances and Bolton slowly began to threaten again, with Nakata striking an acrobatic attempt into the ground and over the bar while Jay-Jay Okocha warmed Ben Foster's gloves with a low drive.
But Bolton's third when it did arrive came something out of the blue with Vaz Te picking up the ball 25 yards out and letting fly with a low right-footed effort that bounced just in front of the dive of Foster before going in off the post.
With the game won, Allardyce took the opportunity to rest some of his remaining senior players - with six ruled out through suspension or African Cup of Nations involvement - bringing on some of his academy youngsters for a taste of first-team action.
Watford: Gavin Mahon - The Hornets skipper gave a committed display in midfield, but was unable to prevent his side going down to their Premiership opponents.
Bolton: Ricardo Gardner - The left-sided star was a constant menace to the Hornets rearguard and was rarely caught out of position in defence.