Steve Bruce’s side took the lead in the first half through Sean Longstaff’s stunning strike – his first in 14 months.
Chances were squandered before Ismaila Sarr equalised for the hosts on 72 minutes.
The Hornets celebrated a winner, that was until VAR ruled out Josh King’s goal for offside.
Substitute Jacob Murphy went one-on-one with Ben Forster in the final seconds of the match but his chipped attempt was read by the goalkeeper.
Our man Miles Starforth was at Vicarage Road – and he has dished out his Newcastle player ratings:
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9. Miguel Almiron - 7
Got around the pitch all afternoon, and linked well with Saint-Maximin, caused problems for Watford in the final third, and forced a second-half save from Foster. Photo: Stephen Pond
10. Joelinton - 7
Linked play well on the left, also tested Foster in the second half, was an important physical presence for United in a niggly game. Photo: Ian MacNicol
11. Allan Saint-Maximin - 7
Set up Longstaff for his goal, and created a second-half chance for Willock with a superb cross, never let up. Photo: Stephen Pond
12. Jacob Murphy (for Almiron, 79) - N/A
Missed a late one-on-one to win it for Newcastle. Photo: Alex Morton