United moved to within two points of second placed Spurs and extended our unbeaten league run to 16 matches.
Walter Mazzarri's side beat the Reds for the first time ever in the league back in September and came into this meeting off the back of successive wins over Arsenal and Burnley.
United were impressive throughout and played some of their best football of the season to stay in the hunt for a top four finish and the Champions League qualification that brings.
The Reds started brightly and after a clever interchange between Antonio Valencia and Juan Mata, went close when Zlatan Ibrahimovic scuffed his shot wide.
Henrikh Mkhitaryan tested Hornets keeper Heurelho Gomes from distance but the visitors had not come to merely sit back and soon went close themselves.
Jose Holebas was Watford's pacy outlet on the counter-attack and he unleashed a dipping 30 yarder that flew narrowly wide.
Gomes saved superbly from a similar Paul Pogba effort, Ibrahimovic volleyed over and Ander Herrera then went close twice in quick succession.
After frustrating home draws against Stoke, Burnley, West Ham and Hull, it was beginning to look like another one of those days for United as Gomes continued to come to his side's rescue.
He somehow turned away Ibra's goalbound header from five yards, but was finally beaten moments later as United moved ahead just after the half hour mark.
Mkhitaryan released Anthony Martial free down the left, and the lively Frenchman cut the ball back for the 'Special Juan' Mata to tap home.
David de Gea was called into action to claw away Mauro Zarate's free-kick and Martial flashed a shot inches wide at the other end.
Sitting on an increasingly nervy one goal lead, the Reds had to wait until the hour mark to put the result beyond doubt.
Martial linked up well with an unselfish Ibra and wrong-footed Gomes with a neat finish at the near post.
To their credit, Watford continued to press and should have pulled a goal back almost immediately.
Daryl Janmaat sliced wastefully wide, Troy Deeney was denied by De Gea and then Gomes kept out Mkhitaryan after a good save with his legs.
Ibrahimovic had a late chance for 3-0, but the Reds had done more than enough to wrap the victory ahead of a run of four matches in three cup competitions.
Incidentally, this result ensured that United became to first team to stack up 2,000 Premier League points.
Overall team performance: 8/10
United Faithful Man of the Match: Tony Martial, he came from France....