Etienne Capoue scored the opening goal for the home side in the 34th minute. Miguel Britos and Daryl Janmaat won the ball from Anthony Martial and forwarded the ball to Capoue who found the back of the net with ease.
Anthony Martial got injured in his head during the clash with Britos. He was soon replaced by Jose Mourinho and Ashley Young was introduced.
Manchester United dominated the proceedings in the first half but they were wasteful. Paul Pogba's 30-yards long ranger had hit the cross-bar in the 31st minute.
Walter Mazzari's men went into half time high confidence the scoreboard flashing 1-0 in favour of them.
Manchester United once again started dominating the game in terms of possession as Watford continued their counter-attacking style.
The away side launched a series of attacks and finally got rewarded due to their high pressing game when Marcus Rashford netted the equaliser in the 62nd minute.
Juan Mata was soon introduced into the game replacing Antonio Valencia. Young was sent to the right-back position.
Captain Wayne Rooney had a dreadful day on the pitch who failed to make any positive contribution towards his team.
Much to Mourinho's shock, Manchester United conceded a second goal in the 83rd minute. Roberto Pereyra went past United defenders and provided a wonderful pass to Juan Camilo Zuniga who found the back of the net with a neat finish.
Tha final nail in the coffin was hammered when Marouane Fellaini brought down Zuniga inside their penalty box and a penalty was awarded to Watford.
Striker Troy Deeney scored from the spot to assure Watford's vital three points. This was third consecutive defeat for Jose Mourinho's side.