In what was a scrappy affair in the East-Midlands, the Foxes seized the advantage in the 39th minute with Jamie Vardy dispatching a penalty after being fouled by Molla Wagué. It took an excellent block from Harry Maguire to halt Andre Gray's goal-bound shot after he had run through unchallenged.
The three points were wrapped up in stoppage team through a skilful solo run and finish from Riyad Mahrez.
Foxes boss Claude Puel selected an unchanged line-up to the side that drew 0-0 with Chelsea last weekend. New signing Fousseni Diabaté was given his first opportunity in a Leicester shirt as he started on the bench. The likes of Vicente Iborra and Islam Slimani dropped out of the matchday squad altogether.
Marco Silva meanwhile made three alterations to the Watford side that snatched a draw against Southampton last time out. Skipper Troy Deeney replaced Andre Gray, and Roberto Pereyra was drafted in the place of the injured Tom Cleverley. Goalkeeper, Heurelho Gomes, who was out with a knock dropped out in place of Orestis Karnezis.
Vardy proves troublesome for the Hornets
The Foxes enjoyed a quick start at the King Power Stadium as Vardy raced through. The England striker could only put his low shot straight at the Watford goalkeeper. Midfielder Wilfred N'didi might have opened the scoring only minutes later as he latched onto a Riyad Mahrez free kick but Richarlison did well to deflect his powerful effort away.
Troy Deeney did well to turn and finish clinically but the Watford striker was unlucky to see his effort ruled out for offside.
Only six minutes from half-time, Claude Puel's men were given the opportunity to take the lead. Vardy did well to collect a Matty James pass and was sent sprawling by Wagué's lunging challenge. The 31-year-old forward stepped up to the spot and finished coolly, slotting into the bottom corner.
Missed chances the story of Leicester's evening
Marco Silva introduced Andre Gray to the fray after the break and Leicester were put under immediate pressure. The former Burnley man might have dragged the visitors level as he charged through one-on-one but Maguire got back well to deflect his low finish away from goal.
Vardy again found space down the left-flank and pulled back to the onrushing Shinji Okazaki. The Japanese forward did not get enough purchase on the shot however and Karnezis collected comfortably.
As Watford continued to press, space began to open up for the Foxes. Vardy again powered through and escaped from Wagué who had pulled up. The ball broke for Ben Chilwell but the visitors cleared the youngster's cross on the line.
Foxes secure win as Watford wilt
N'didi again went close in the closing stages as he combined well with the irrepressible Vardy. The Nigerian however was unfortunate to see Karnezis deflect away his powerful shot.
The three points were eventually wrapped up in the first minute of stoppage time. Substitute Adrien Silva broke down a Watford attack and moved into midfield. The Portuguese international played Riyad Mahrez through on the left. He danced into the box and finished well past the goalkeeper from a tight angle into the far post.
As a result, Leicester City move up to seventh in the Premier League table, one point ahead of Burnley. Watford meanwhile remain in tenth after only one win in their last 11 league games.