Arsenal moved third in the Premiership thanks to a late Robin van Persie winner at a heartbroken Watford.
Silva (l) celebrates his goal with his team-mates but the smiles did not last long
Arsenal took the lead against the run of play when Gilberto Silva nodded in at the far post, but Watford hit back when Tommy Smith lashed in a shot.
Watford tested a struggling Arsenal while having keeper Ben Foster to thank for keeping out shots from Emmanuel Adebayor and Justin Hoyte.
Arsenal pressed for a late winner and Van Persie obliged with a curling shot.
There had been enough endeavour and enterprise about Watford's start to suggest a goalscoring threat and Arsenal were quickly forced on to the backfoot.
The Hornets looked especially menacing from set-pieces and Arsenal's young and inexperienced defence looked suspect if the home side could find the quality to take advantage.
But, despite their early pressure, Watford had Foster to thank for keeping them level as he twice saved angled strikes from Van Persie after Arsenal counter-attacks.
A similar Van Persie effort went agonisingly wide before Watford striker Ashley Young's eyes lit up as a clear sight of goal opened up in front of him.
Smith's industry was a threat to Arsenal and he notched a goal for his efforts
Young's shot was blocked by the last-ditch sliding tackle of Gilberto, who then raced up the other end to nod in at the far post after a corner was flicked on by Kolo Toure.
Watford refused to buckle and continued to attack, a looped Young effort forcing Gunners keeper Jens Lehmann to scramble across his goal and palm the ball away.
The resilience of the home side brought a deserved equaliser with Hameur Bouazza's surging run and deflected cross being powerfully lashed in by Smith.
The Hornets were applauded off at half-time but almost let themselves down shortly after the interval.
Tomas Rosicky left Watford right-back Adrian Mariappa trailing as he burst through on the Watford goal only to have his stabbed shot blocked by Foster.
There were signs of panic from Arsenal as the game wore on, before the visitors finally started to exert some pressure with flashes of their familiar fluid football.
Foster again had to come to his side's rescue when he spread himself to keep out an Adebayor shot with his legs and then palmed away an angled Hoyte drive.
Arsenal scented a win and Julio Baptista and Adebayor shot just wide as the visitors produced a late surge.
Watford struggled as Arsenal upped their game and eventually caved in when substitute Theo Walcott released Van Persie, who cut in from the right and curled a shot in at the far post for the winner.
Watford boss Aidy Boothroyd:
"That game should have finished 1-1 and we didn't lock it up as we should have done.
"We lose a player who was outstanding in Hameur Bouazza and it turns the game in many ways.
"We will just keep going, get that momentum and string some results together and make it exciting."
Arsenal boss Arsene Wenger:
"Robin van Persie has developed into a team player now.
"He works very hard and in this game created more chances in the first half. In the second he had one and scored.
"He did it in a great style and there is some Bergkamp in there in the way he finishes - he is open-footed, strikes it cleanly and makes quick decisions."
Watford: Foster, Mariappa, Shittu (Priskin 90), DeMerit, Stewart, Smith, Mahon, Bangura, McNamee (Henderson 77), Young, Bouazza (Francis 69).
Subs Not Used: Lee, Doyley.
Goals: Smith 23.
Arsenal: Lehmann, Hoyte, Toure, Djourou (Senderos 46), Clichy, Hleb (Walcott 71), Fabregas, Silva, Rosicky (Julio Baptista 79), Van Persie, Adebayor.
Subs Not Used: Almunia, Flamini.
Goals: Silva 19, Van Persie 83.
Ref: M Dean (Wirral).