A late Juan Mata free-kick broke Watford's stubborn resistance and gave United a fourth successive win as the Reds moved level on points with neighbours City.
The Hornets had frustrated United up until seven minutes from time when stand-in skipper Mata curled home a 20-yard set-piece to settle a contest in which Watford had enjoyed the better chances.
On a night when all of United's main rivals dropped points, this was a win that felt very significant and it was only the second time we've had a four game winning streak all season.
Jose Holebas almost put through his own net as he deflected a Daley Blind cross goalwards but Heurelho Gomes was alert to clear, whilst the returning Anthony Martial should have done better with a header.
Morgan Schneiderlin lashed a dipping volley narrowly wide, but Watford remained a threat and went close themselves through Odion Ighalo, whom was just off target with a deflected strike.
It was the Nigerian who created- and subsequently spurned- the best chance of the half when he raced onto a misplaced pass and found himself one-on-one, but David De Gea saved with an outstretched leg.
The Spaniard was called into action, again to keep out Ighalo, as he dived at the feet of the forward to keep the sides level at the interval.
Etienne Capoue fired inches over the bar three minutes after the restart before Marcus Rashford cleared off the line from Sebastian Prodl's header from a corner.
Watford were by now on top, and might have taken advantage- again through Ighalo- as the striker turned Tim Fosu-Mensah and curled an effort past the post.
United went close soon afterwards with their first meaningful attack of the half as Mata strung the palms of Gomes whom beat away the Spaniard's well-hit shot.
That opening led to a flurry of chances for the Reds as Rashford lashed across goal and Mata fired wide as United began to up the ante attacking the Stretford End in search of the winner.
Watford could have taken the lead with a couple of half-chances from corners but it was United whom finally broke the deadlock with a set-piece of their own.
Martial went down under a challenge from Miguel Britos 20 yards out, and Mata stepped up to curl a beautiful effort over the wall and past the despairing dive of Gomes.
The Spaniard was withdrawn late on as his goal proved enough for three precious and important points.
Overall team performance: 6/10
United Faithful Man of the Match: Mata may have won the game but Rashford's pace and trickery caused problems throughout.