Reading remained on course to bounce back up to the Premier League with a clinical 11th home win of the season.
Stephen Hunt impressed, setting up the first two goals - Chris Armstrong volleying home in the first half and Noel Hunt converting from close range.
Kevin Doyle and Leroy Lita also cashed in as the Hornets defence crumbled.
Watford, who had a penalty appeal for handball turned down by referee Andy D'Urso, barely troubled Reading and remain close to relegation territory.
Reading manager Steve Coppell on his surfeit of strikers:
"It's no headache for me to have four strikers, I can assure you of that.
"It's a nice position to be in, my strikers are uncomfortable which is what I want.
"Noel Hunt and Kevin Doyle both scored but so did Leroy so they can't relax.
"Leroy always gets a great reception here. I have no plan as such with him."
Watford manager Brendan Rodgers: "We had a crazy minute in the second half where we gifted them two goals.
"You cannot do that against a quality side like Reading who will go up for sure this season.
"Defending has been our Achilles heel all season, even before I came here, and we seem to take one step forward and two steps back."
Reading: Federici, Rosenior, Duberry, Ingimarsson, Armstrong, Kebe, Cisse (Gunnarsson 77), Harper, Noel Hunt (Long 75), Doyle (Lita 76), Stephen Hunt.
Subs Not Used: Matejovsky, Andersen.
Goals: Armstrong 38, Noel Hunt 67, Doyle 68, Lita 89.
Watford: Loach, Hoyte, Mariappa, DeMerit, Harley, Cork, Jenkins (Rasiak 65), Williamson, McAnuff, Smith, Priskin.
Subs Not Used: Lee, Bromby, Bridcutt, O'Toole.
Att: 18,072
Ref: Andy D'Urso (Essex).
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