Steven Gerrard scored the only goal as Liverpool beat Watford to seal their place in the Carling Cup final.
Fernando Morientes almost scored after a smart one-two with Gerrard but Neil Cox did superbly to deflect his shot inches wide in the first half.
Gerrard settled a game of few chances with a drilled shot from the edge of the area close to the end.
Heidar Helguson almost pulled a goal back for the home team in the final minutes but headed over from a corner.
Liverpool will now play either Manchester United or Chelsea in the final at the Millennium Stadium.
It was a much improved performance by the visitors after the defeats at Burnley and Southampton provoked much criticism.
Rafael Benitez - criticised for the weakened team he fielded against Burnley in the FA Cup - selected his strongest side.
Gerrard passed a late fitness test on a hamstring injury, while Morientes and Milan Baros both started.
Watford defended manfully throughout and it was 27 minutes before Liverpool came close to scoring.
Morientes and Gerrard unlocked the Watford defence before Cox's superb last-ditch challenge.
Moments earlier a well-worked corner had created space for John Arne Riise but the Norway international scuffed his shot.
Watford did manage to craft a long-range shooting opportunity but Helguson he dragged his shot wide. Liverpool caught Watford short of numbers in defence but Gerrard - uncertain whether to square the ball or shoot himself - eventually passed between Morientes and Baros - and the chance was gone.
In first-half injury-time Watford finally enjoyed period of pressure and caused the Liverpool defence problems.
Ray Lewington's team appealed for a penalty after Hameur Bouazza went down under a challenge from Steve Finnan but referee Mike Riley waved play on.
And a cross by Jermaine Darlington saw the visitors struggling to clear their lines, but they held on until the break.
Gerrard's precise pass appeared to have put Baros through on goal five minutes into the second-half but Cox made a superb tackle to put the ball out for a corner.
The Liverpool skipper went down after tangling with James Chambers but for the second time in the match the referee was not interested in awarding a penalty.
Morientes weaved through the Hornets defence but saw his shot blocked as Liverpool looked for the decisive goal and Biscan drilled the ball across goal and wide as time ticked down.
But with 13 minutes left Gerrard settled the tie, running across the Hornets backline before placing the ball past Jones and into the bottom corner.
Helguson almost pulled a goal back with a header but could not keep his attempt on target.
Watford: Jones, Darlington, Cox, Demerit, Chambers, Devlin (McNamee 80), Gunnarsson (Dyer 77), Mahon, Ardley, Bouazza (Webber 56), Helguson.
Subs Not Used: Chamberlain, Doyley.
Liverpool: Dudek, Carragher, Pellegrino, Traore, Riise, Finnan, Gerrard (Potter 90), Hamann, Biscan, Baros (Sinama Pongolle 85), Morientes, Sinama Pongolle (Luis Garcia 89).
Subs Not Used: Carson, Warnock.
Goals: Gerrard 77.
Ref: M Riley (W Yorkshire).