Ismaila Sarr scored twice while captain Troy Deeney added a third in a sparkling second-half display from the hosts as Liverpool’s run of victories was brought to a shuddering halt.
The Reds had won their past 18 Premier League games and another at Vicarage Road would have made history as the longest winning run in the English top flight.
But they never got going against a Watford side who were superb from start to finish.
The Hornets had more chances in the first half and only a superb save from Alisson, to deny Troy Deeney, prevented them from leading at the break.
However, Watford deservedly took the lead when Abdoulaye Doucoure squeezed a cross in from the left and the impressive Sarr was there to stab in.
Liverpool had fallen behind against West Ham last week but still managed to grind out a win. However, there was a feeling that this time was different, with the Reds sloppy in possession and lacking bite in attack.
It was no surprise that Watford doubled their advantage. Sarr was put through on goal by Will Hughes and the winger calmly lifted the ball over Alisson and into the net.
Captain Deeney then completed a famous victory, curling into the back of the net from the edge of the area.
This is not a result that is going to halt Liverpool’s title charge with the Reds 22 points clear at the top but it was nevertheless an unexpected and memorable result for Watford.
