Hornets boss Malky Mackay gave striker Will Hoskins his first league start since October and the move paid off as the former Rotherham United man fired home what turned out to be the winner with 13 minutes remaining.
Earlier, Henri Lansbury had given the home side an early lead before Jack Colback equalised midway through the second half for the Tractor Boys, who must be completely sick of their opponents.
This was the 11th successive meeting between the two clubs in all competitions Ipswich have failed to win, and they have not picked up three points at Vicarage Road since 2003.
Watford were almost in front inside 90 seconds when Lansbury's free-kick from 25 yards struck the far post and Hoskins saw his follow-up header blocked. But the Hornets didn't have long to wait to end their four-and-a-half-hour search for a goal.
Again it came from a set-piece in a similar position, but this time Lansbury's whipped in eighth-minute delivery evaded everyone as it beat the dive of keeper Brian Murphy and bounced into the far corner.
Watford almost doubled their lead at the far post when they hit the woodwork again - this time Heidar Helguson heading a Lloyd Doyley cross against the far post.
A superb Tom Cleverley curling shot from 20 yards was kept out by some last-ditch Town defending after the restart, but in the 68th minute the visitors levelled.
Following a short corner, Shane O'Connor was given too much time to pick out a cross to the far post and, although England Under-21 keeper Scott Loach did well to block the initial effort, he was helpless to prevent Colback slamming home the equaliser.
Within eight minutes though, Watford had regained what turned out to be a decisive advantage. Cleverley lifted the ball into the area from wide on the right flank. It took a helpful bounce off substitute Danny Graham, and the man who replaced him in the starting eleven, Hoskins, swivelled to beat Murphy from 15 yards.