Abdoulaye Doucoure's controversial last-gasp equaliser denied Southampton a first win in 10 matches.
The midfielder diverted the ball in with his arm a minute before full-time as Watford came from two goals down to snatch a 2-2 draw.
James Ward-Prowse had scored twice in the first half before Andre Gray pulled one back – and Saints were crestfallen when Doucoure's equaliser was allowed to stand.
He stooped to nod into the net – but the ball missed his head and he swept it home with his arm.
Southampton protested long and hard to referee Roger East but to no avail, with a draw leaving them just one point above the relegation zone.
It was a cruel end to a bright display from the visitors, whose attack was superbly led by Shane Long, the architect of both their goals.
The striker certainly has a spring in his step again after ending a 35-match goal drought against Crystal Palace a fortnight ago.
He was denied by a narrow offside decision, a last-ditch tackle from Christian Kabasele and the onrushing Hornets keeper Heurelho Gomes all in the opening 15 minutes.
Gray should have put Watford ahead but took an air shot in front of goal from Doucoure's cross, before Daryl Janmaat's drive was tipped over by Alex McCarthy.
Instead Southampton took the lead in the 21st minute thanks to the industrious Long and some generous Watford defending.
Ward-Prowse, Saints' goalscorer in their FA Cup win at Fulham last weekend, collected Long's cutback and had all the time in the world to pick his spot before slotting home from 12 yards.
Buoyed after scoring only their eighth away league goal of the season, the visitors went in search of more with defender Wesley Hoedt trying his luck from 45 yards, forcing Gomes to touch the ball over.
And they were rewarded moments before half-time when Hoedt's clearance on the edge of the area left Long with a 60-yard foot race against Molla Wague. The Irishman tore past the full-back along the left touchline before squaring to Dusan Tadic, who laid the ball off for Ward-Prowse to smash home.
Watford were booed off at the break but hauled themselves back into the game before the hour mark after McCarthy had pushed Janmaat's drive against the crossbar. Gray reacted quickest to bundle the loose ball over the line for his fourth goal of the season.
And with time running out Doucoure's sucker punch from Troy Deeney's header back across goal denied Saints a valuable victory.