Story of the game
Ezri Konsa's 95th-minute strike sent Villa Park into pandemonium as his effort from outside the box deflected off Tyrone Mings and past a helpless Ben Foster.
Troy Deeney's sixth goal in four league games against Villa set the Hornets on their way for a fifth win under new boss Nigel Pearson until Douglas Luiz levelled for Villa.
It was a first half of considerable dominance for hosts Villa, with Jack Grealish receiving the ball wide of Watford penalty area on countless occasions.
Anwar El Ghazi and Matt Targett were almost the beneficiaries of Grealish's vision on the left flank. El Ghazi's effort from inside the box failed to trouble Foster, whilst Targett's crossing wasn't up to catch.
Marvelous Nakamba won a midfield duel with Etienne Capoue but on the 37th minute, Villa fell behind through a Deeney header as he once again became the villain at the Holte End.
It was Gerard Deulofeu's cross at the right-hand by-line that assisted the Watford talisman before the interval.
Villa are the only team left in the Premier League to have not scored a header, even after making over 470 crosses this season. Kortney Hause came close to levelling the scores minutes after half-time as Trezeguet swung in a dangerous cross.
Grealish again caused problemS in the early stages of the second period, but ultimately Villa stifled without a recognised centre forward on the pitch for a fifth game running.
It was one-way traffic until Deeney once more troubled the Villa backline. Adam Masina's cross from the left was volleyed across Pepe Reina's box, and with Deeney poised to score his second, the Spaniard preserved Villa's one-goal deficit by blocking his effort from six yards out.
Capoue and Abdoulaye Doucouré had a new customer to contend with on the hour mark, as Douglas Luiz - fresh from assisting his second goal for the club against Brighton & Hove Albion - replaced Danny Drinkwater.
The Brazilian only needed ten minutes to better his impact from three days ago by scoring his first goal in the Premier League. Targett's searching cross was brilliantly stopped by Foster who palmed into the path of Luiz to strike into the roof of the net.
A stalemate ensued until deep into stoppage time, Konsa found the most miraculous time to came up with his first top-flight goal. The former Brentford man, elated from with his contribution, stormed into the Holte End to celebrate with the Villa fans.
His winning goal lifts Villa outside of the Premier League bottom three with a visit to Bournemouth up next for Dean Smith's side.
Takeaways
Samatta can't join soon enough
Villa were stifled by a solid Watford defence that for the most part remained untroubled until Luiz found a late leveller for Villa before conceding again.
Without a senior striker at the club, Indiana Vassilev made his second appearance in the Premier League and caused problems with his energy and willingness to chase every loose ball. It was no surprise that his hard work for the team eventually paid off when Konsa struck deep into additional time.
Watford unlucky
Nigel Pearson cut a frustrated yet optimistic figure in his post-match press conference. After losing only his second match in charge, Pearson will be looking for more of what he saw in the first weeks of his tenure moving forward.
The absence of Ismaili Sarr turned out to be a major blow for a Watford side reliant on his trickery from the flanks.
Villa must improve
Whilst Villa have moved above the relegation places with the win over fellow struggled Watford, three points may have just papered over the cracks for the time being.
It was a six-pointer and the win was the most important thing n the night for Villa, but ultimately it was another unconvincing, overall display.
Man of the match
Marvelous Nakamba hasn't shown such a performance since joining the club from Club Brugge in the summer.
The Zimbabwean midfielder recovered the ball 11 times and managed an impressive 82% pass completion rate.