Jobi McAnuff grabbed his first of the season to end Watford's disastrous spell that had seen then knocked off the Championship top spot.
The little midfielder struck early in the game to ease a mini-crisis for Aidy Boothroyd's promotion chasers after a spectacular start to the season.
Injury ravaged Sheffield Wednesday, with just one win in five, were behind after six minutes as Watford sliced through their back four in clinical fashion, Nathan Ellington threading the ball to McAnuff who stabbed it beyond Lee Grant's reach from 12 yards.
Wednesday, with three strikers sidelined through injury, carved out an opening after a Jordan Stewart blunder let in Jermaine Johnson on the right flank, but his teasing cross aimed for Burton O'Brien was cut out by Damien Francis.
Watford should have grabbed a second as the hard-working Ellington teased the home defence as he cut inside to pump in a low cross to midfielder John O'Toole, who scooped the ball over the target from six yards.
Midfielder O'Brien found a chink in the Watford rearguard as he got the better of Lloyd Doyley before picking out Steve Watson who miscued ten yards out. Marcus Tudgay was the culprit on 36 minutes as Wednesday squandered another good chance.Glenn Whelan, who could be on his way out of Hillsborough when the January transfer window opens, found Wade Small on the left wing, his precise pass fell nicely for unmarked striker Tudgay, who dragged his low strike wide of the far post.
Tudgay produced a stunning strike minutes after the restart, pushed round the post in spectacular fashion by Richard Lee, before McAnuff forced his way into the area only for his right-foot shot to be blocked by centre-back Richard Hinds.
Substitute Yoann Folly went close minutes later as he beat his marker at the far post to reach a Whelan cross, but headed wide from eight yards as the Sheffield side desperately searched for an equaliser.