Ten-man Leicester moved a step closer to securing a Championship play-off place and deepened Watford's relegation fears with a convincing victory.
Martyn Waghorn fired the Foxes ahead from the penalty spot and Paul Gallagher added a stunning second before Steve Howard was sent off.
Nigel Pearson's side pulled further clear with goals from Jay Spearing and James Vaughan.
Martin Taylor pulled a goal back for the Hornets late on.
The result ensures Leicester remain four points clear of seventh-placed Blackpool with two games remaining.
But Watford remain in serious danger at the other end of the table following a first defeat in four.
Leicester went ahead in controversial circumstances nine minutes before the break when Jay DeMerit was penalised for a foul on Richie Wellens, despite appearing to take the ball with his challenge, and Waghorn made no mistake with the resulting spot-kick.
The home side doubled their lead five minutes later as Gallagher lashed home a superb left-footed volley from the edge of the area.
Watford's hopes of mounting a comeback were lifted when Howard received a straight red card on the stroke of half-time for a lunging tackle on Ross Jenkins in first-half stoppage time.
But it was Leicester who struck again six minutes after the interval, Spearing applying the finish after the Hornets had failed to deal with a bouncing ball in the area.
Vaughan, on as a replacement for Gallagher, wasted a clear chance to add a fourth for the hosts as he fired straight at Loach.
However, the on-loan Everton youngster did manage to get on the scoresheet in the 67th minute when he held off his marker before finishing coolly.
Watford substitute Taylor reduced his side's arrears 13 minutes from time with a header from Michael Bryan's corner, but Leicester were already home and dry.
Leicester manager Nigel Pearson:
"We are not quite there yet, but we are in a decent position.
"We've worked hard to be in this good position and now we've got to make sure we see that through.
"I've not had a chance to look at the sending off, but the referee's assistant said it was a caution. From what I've heard though, it was a rash challenge."
Watford manager Malky Mackay:
"This is a tough place to come to with Leicester heading for the play-offs.
"You've got to be on your mettle, and we weren't today. We can't afford to give such good players so much time and space.
"We didn't really perform and now we've got three games to go and have to make sure we get as many points as possible, starting at QPR on Tuesday."
90:00+5:15 Corner from the right by-line taken by Michael Bryan, clearance made by Wayne Brown.
90:00+0:26 Shot by Nicky Adams from deep inside the penalty area misses wide to the left of the target.
87:45 Outswinging corner taken right-footed by Henri Lansbury.
86:34 Booking Booking for James Vaughan for unsporting behaviour.
86:21 Henri Lansbury fouled by James Vaughan, the ref awards a free kick. Scott Loach restarts play with the free kick.
83:22 The official flags Martin Taylor offside. Chris Weale restarts play with the free kick.
79:06 Henri Lansbury takes a shot. Save by Chris Weale.
77:59 Assist on the goal came from Michael Bryan.
77:59 GOAL - Martin Taylor:Leicester 4 - 1 Watford Martin Taylor grabs a headed goal from inside the six-yard box. Leicester 4-1 Watford.
76:42 corner taken by Michael Bryan, Jon Harley takes a shot. Save by Chris Weale. Corner from the right by-line taken by Michael
Correction - 74:36 The assistant referee flags for offside against Heidar Helguson. Chris Weale takes the indirect free kick.
74:36 Heidar Helguson is flagged offside by the assistant referee. Free kick taken by Chris Weale.
73:36 Outswinging corner taken by Henri Lansbury from the right by-line, clearance by Wayne Brown.
71:40 Shot from just outside the box by James Vaughan misses to the left of the target.
68:03 Substitution Don Cowie leaves the field to be replaced by Michael Bryan.
66:54 The assist for the goal came from Jay Spearing.
66:54 GOAL - James Vaughan:Leicester 4 - 0 Watford James Vaughan gets on the score sheet with a goal from inside the box to the bottom right corner of the goal. Leicester 4-0
65:55 Unfair challenge on Nicky Adams by John Eustace results in a free kick. Nicky Adams takes the free kick.
64:47 Substitution (Leicester) makes a substitution, with Yann Kermorgant coming on for Martyn Waghorn.
61:35 Outswinging corner taken by Henri Lansbury from the right by-line played to the near post, Corner taken right-footed by Henri
Lansbury from the right by-line, clearance made by Jay Spearing. Wayne Brown manages to make a clearance. Henri Lansbury takes
the outswinging corner, clearance by Jack Hobbs.
58:40 Outswinging corner taken from the right by-line by Don Cowie, clearance by Jay Spearing.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.