Only goal difference is now keeping the Hornets out of the relegation zone, but Watford had looked on track to add to their points total until Jay Demerit was controversially sent off early in the second half.
The American received a second yellow card for a foul on Rob Hulse, but referee Nigel Miller didn't appear to realise he was giving the defender another caution until it was too late.
Leeds made their numerical advantage count when Clarke Carlisle headed home at the far post but Watford had their chances to earn a point.
Ashley Young was unlucky to see a 20-yard curling shot bounce down off the crossbar while Neil Sullivan did well to keep out a Heidar Helguson header late on.
Leeds had opportunities to extend their advantage but keeper Richard Lee did well to deny Marlon King who was clean through, while Hulse should have done better with a close-range header from a corner that he put over.
It was Hulse who headed the visitors in front in the first half, guiding a superb header inside Lee's left hand post after being picked out by Sean Gregan. But Watford should already have been in front within the opening few minutes, but Helguson placed the shot too close to Sullivan.
Having gone behind the Hornets came close to levelling in sensational style when Chris Eagles embarked on an amazing 50-yard run that took him past four opponents, but his rising shot was pushed over by the in-form Leeds keeper.
Watford did deservedly draw level in the closing minutes of the first half when Sullivan could only parry a stinging Brynjar Gunnarsson drive back out into play and Helguson guided a follow up header back beyond the keeper from ten yards.