George Burley, believed to be on the verge of being announced as the next Stoke boss, was in the stands to watch Watford take three points from the hosts thanks to first-half strikes from Heidar Helguson and Neil Cox.
Stoke started well but Watford knocked the ball around confidently early on and forced the hosts on to the back foot winning three successive corners.
And from the third corner the visitors went in front when Helguson was allowed a free header at the near post.
Stoke's reply was almost instant when Karl Henry let fly from 30 yards. His shot was heading for the top corner but Alec Chamberlain acrobatically tipped the ball over the crossbar.
The Watford keeper then got down well to his left to push away a fierce 12-yard effort from Tommy Mooney as Stoke pushed for an equaliser.
But the visitors refused to buckle and they went further ahead eight minutes before the break and once again there were questions to be asked about the Stoke marking.
Neal Ardley claimed his second assist of the evening finding Cox unmarked inside the box and his mis-hit shot beat a flat-footed Neil Cutler.
Stoke's confidence appeared to wain a little early on in the second half as they were finding the visitors difficult to break down.
But 18 minutes from time they managed to pull a goal back to give them hope of rescuing a much-needed point, when Mooney darted into the Watford box to meet substitute Bjarni Gudjonsson's right-wing cross with a powerful downward header.
Mooney came close to snatching a 90th minute leveller when he stretched to reach a knockdown from Chris Iwelumo but his boots were two sizes too small