It was certainly a first half to remember for both sides, with Michail Antonio's double seemingly giving Slaven Bilic's side a seemingly unreachable lead. However goals in quick succession from Odion Ighalo and Troy Deeney just before the break brought them right back into the tie.
Watford completed their epic comeback with goals from Étienne Capoue and José Holebas in the second period to secure their first win of the season.
From the word go
The Hammers were looking to continue their 100 percent record at the London Stadium, and Antonio was straight out the blocks as he was through on goal, but forced a good save from Heurelho Gomes who was on hand to save Dimitri Payet's follow-up effort.
It was then Watford's turn as Ighalo did well to drag it past James Collins, however the finish didn't live up to the build-up as he smashed it into the side-netting.
However it was the home side that dealt the first blow five minutes in, Payet was proving dangerous on his return to the side as he whipped the corner in and Antonio headed home with the slight deflection off Deeney.
Searching for another
Antonio almost created a second in peculiar circumstances, the wingers dangerous ball into the area was left untouched, but Daryl Janmaat's attempted back pass clattered the post but the danger was subsequently cleared.
Ighalo looked to be putting home the equaliser after the Hornets almost went two down, as he was one-on-one with Adrian, but a last-ditch tackle from Arthur Masuaku cleared the danger.
The striker was at it again moments later, when he was played in by new signing Roberto Pereyra, but Adrian did well to make the save and wasn't troubled by Valon Behrami wayward follow-up.
Finishing it off
Despite Watford having the better chances after falling behind, West Ham managed to double their lead. Payet had yet to become a solid feature in Bilic's side since his Euro 2016 escapades, but made his return a special one. The winger came inside and produced a magnificent rabona cross to the far post, where Antonio was on hand to easily head home.
Coming back in style
The tie looked to be beyond Walter Mazzarri's side, but found themselves right back in the tie going into the break.
It was poor defending from the home side, specifically Sam Byram, as Ighalo was allowed to make his way into a shooting position and the deflection from James Collins took it in.
They found themselves level in the most spectacular of styles, confusion from Collins saw Adrian rushing off his line with the possession been gifted to Deeney. The angle and distance was against the striker, but he somehow managed to float it in.
Watford looked a different side as they came out for the second half, and pulled out an excellent comeback to turn the game on it's head.
It only took seven second-half minutes to take the lead, as Pereya's ball bounced into Capoue. The former Tottenham man did well to take it on his chest before rifling it into the roof of the net.
It was four just after the hour mark, it proved too easy for the Hornets as Ighalo teed up Holebas. His effort looked easy for Adrian, but it went under the body of the Spaniard and into the net.
Isaac Success almost had an instant impact as Watford searched for a fifth, as he got beyond Collins with ease, but Adrian was off his line to block the effort.