Luke Varney was the hero for the Owls as he broke clear to smash the vital 89th-minute winner past Scott Loach and earn his side an unlikely three points.
The game, which had been terrible for the most part, seemed destined for a draw after Eddie Nolan's strike for the hosts had been cancelled out by Tom Cleverley's equaliser.
Nolan fired low past Loach in the 56th minute for his first ever goal, but the Owls were only ahead for 10 minutes before Cleverley curled a sublime free-kick into the top corner.
The win, just Wednesday's second in their last nine games, takes them above Watford in the table and four points clear of the drop zone.
Other than Cleverley's effort, Malky Mackay's men were not able to test Lee Grant in the Owls net and with one win in their last eight games, League One football is looking a distinct possibility next term.
With both sides struggling for goals, a classic was never on the cards and that is how it panned out as the opening 20 minutes were a turgid affair.
Wednesday almost took the lead in the 25th minute after Darren Potter was fouled 10 yards outside the area, the midfielder then taking the resulting free-kick and seeing his curling effort strike the outside of the post.
That moment of action did little to spark either side into life and the rest of a dire half was a chanceless affair.
To their credit, the Owls came out after the break and played at a far higher tempo and they were rewarded in the 56th minute when they went ahead.
Right-back Nolan advanced down the right into the penalty area and cut inside before firing in a low shot which squirmed under Loach.
It was Nolan's first career goal, but England Under-21 goalkeeper Loach will have been disappointed not to keep it out at his near post.
Wednesday could not build momentum however and were pegged back 10 minutes later as the Hornets showed their first real moment of class.
Watford earned a free-kick when Potter handled and Cleverley curled a delicious effort into the top corner to leave Grant helpless.
Neither side really looked capable of getting a winner until Varney found space on the left and slammed home high into the net to send the home faithful into raptures.