Two second-half goals from hit-man Obafemi Martins saw the great Newcastle revival continue, but heaped further woe on basement side Watford.
The Hornets suffered their sixth defeat of the season on their travels, whereas Newcastle are starting to climb out of trouble and are now up to 12th position.
Martins scored with a header early in the second half and settled the issue late in the game to make it five goals in his last four starts.
In between Hameur Bouazza scrambled an equaliser, but as so often has happened this season, battling Watford could not hold out for a point.
Watford belied their bottom spot with an impressive start to the game that saw Ashley Young outpace Peter Ramage on the right and hit over a telling cross that Steven Taylor, at full stretch, managed to force behind as Darius Henderson was about to pounce.
Newcastle responded and an Emre corner found defender Paul Huntington, but the youngster, unmarked, headed the ball high over the bar.
Emre was once again the provider after Watford keeper Richard Lee had managed to force the ball behind with his legs to keep out a deflected shot from Kieron Dyer. The Turkish international pinpointed Antoine Sibierski, whose glancing header flew wide of the far post.
Emre and Nicky Butt dominated the centre of the park and they combined for Butt to lash a 25-yarder just wide.
Watford almost snatched a shock opener when, completely out of the blue, Henderson shot on the turn from 25 yards and Shay Given managed to claw the ball over the bar.
The corner was cleared halfway into the Newcastle half, where a speculative return from Jordan Stewart took a high bounce and Given was forced again to turn the ball over the bar.
Henderson then wasted a late first-half opportunity when he managed to get into the six-yard box, but was crowded out when he should have done better.
It took Newcastle just four minutes of the second half to break the deadlock. Butt spread the ball wide to James Milner on the right and his cross was perfect for Martins to head in from close range.
Newcastle then upped the tempo but were pegged back just three minutes before the hour mark.
Young took a corner on the left, which was flicked on by Tommy Smith and Bouazza scrambled the ball over the line.
Lifted by the goal, Watford had a golden opportunity when Henderson broke free, although looking offside and got in a low shot that Given fell on.
With a draw looking the most likely of outcomes it was Newcastle who went to grab the winner five minutes from time.
Damien Duff - on for the injured Emre - drove the ball over from the left and while Martins looked at first as if he had lost control, he managed to lash home a right-foot shot from the penalty spot to give Lee absolutely no chance.
It could have been worse for shell-shocked Watford as Duff found himself in a perfect position, but fired woefully wide late on.
Glenn Roeder said: "I am absolutely delighted with the result. Shay Given didn't have a lot to do and that's a fact.
"Give some credit to our players. The amount of games we've played and the injuries we've had - we do deserve some credit.
"Today we have seen the Obafemi Martins I've told you about - those were two magnificent finishes.
"It's so pleasing that the chairman found the money. He was an expensive investment and the chairman backed my judgement.
"Martins is an investment who will give us good service and that is the type of player this club must search for. He's got the attitude of a player who will keep improving." One striker who was not so happy is £9.5million Spanish misfit Albert Luque. The former Deportivo La Coruna player is believed to have stormed out of St James' Park when he did not make the final 16.
"He was in the squad but did not make the substitutes bench and that is all I am saying on the matter," added Roeder.
Hornets boss Aidy Boothroyd added: "It's disappointing to come to a place like this and give a performance like we did and go home with nothing.
"I'm very disappointed, but I can't wallow in it. It's another punch on the nose and it's a matter of keeping going until we get it right and waiting for sod's law to turn.
"As a team we are used to winning and the players want to win. We've stopped a good team from playing well, but whichever way you look at it we have got nothing from the game.
"You have to take your chances in this division and we've got to learn a lot of lessons quickly."
Newcastle United: Shay Given, Celestine Babayaro, Peter Ramage, Paul Huntington, Nicky Butt (Scott Parker 76), Steven Taylor, Emre Belozoglu (Damien Duff 6
, Antoine Sibierski, Kieron Dyer, James Milner, Obafemi Martins
Subs not used: Giuseppe Rossi, Matty Pattison, Pavel Srnicek
Watford: Richard Lee, Jordan Stewart, Daniel Shittu, Jay Demerit, James Chambers (Adrian Mariappa 63), Alhassan Bangura, Gavin Mahon, Hameur Bouazza, Darius Henderson, Ashley Young, Tommy Smith (Damien Francis 7
Subs not used: Anthony McNamee, Chris Powell, Alec Chamberlain
Referee: Martin Atkinson
Attendance: 49231