Darren Byfield's goal on his debut just four minutes from time saw Sunderland
claw their way back from a two-goal deficit to steal a share of the spoils.
Watford had shocked their high-flying visitors with a goal from Gavin Mahon.
And a second-half penalty from Neil Cox, after Heidar Helguson had been brought down in the area, seemingly put the home side on course for victory.
But Marcus Stewart powered home a
header from Jason McAteer's corner and Byfield nipped in late on.
Sunderland, with four league wins out of five going into this match, had started with new signing Byfield on the bench.
But Mick McCarthy's promotion-chasers were rocked after just seven minutes as
the home side, just a point above the relegation zone before kick-off, took the
Paul Devlin's flick found Scott Fitzgerald, whose cutback was coolly
sidefooted past Sunderland goalkeeper Mart Poom by midfielder Mahon.
Despite enjoying the lion's share of possession, Sunderland were continually frustrated by some resolute defending from the home side.
They missed a chance just before the break when George McCartney's cross found McAteer, but he steered his header wide of the target.
In an effort to turn things around and pep up his attack McCarthy introduced strikers Stewart and Byfield.
But it was Watford who regained the initiative and they doubled their
advantage from the penalty spot just five minutes later.
Phil Babb was adjudged to have fouled Helguson and Cox thumped his spot-kick
But Sunderland gave themselves hope by halving the deficit with 14 minutes
McAteer's corner was flicked on by Stephen Wright and Stewart powered home a
Byfield then stole the headlines with his late intervention.
Watford: Pidgeley, Cox, Dyche, Ifil, Smith, Hyde, Ardley,
Mahon, Fitzgerald, Devlin, Helguson. Subs: Chamberlain,
Vernazza, Dyer, Cook, Bouazza.
Sunderland: Poom, Wright, Bjorklund, Babb, McCartney, McAteer,
Whitley, Thirlwell, Arca, Tommy Smith, Kyle. Subs: Stewart,
Oster, Williams, Byfield, Alnwick.
Referee: L Probert (Gloucestershire).