Marvin Sordell's first-half goal from close range was enough to seal the points and continued Sordell's good run of goalscoring form for the Hornets, who remain unbeaten on the road this term.
Sheffield United will consider themselves unlucky not to have taken a point from the encounter as they created a host of second-half chances with Daniel Bogdanovic's free header their best opportunity.
The win sees Watford build on their impressive start to the season and they are firmly in the early play-off picture, while Gary Speed's introduction to life as a manager is proving a testing one as the Blades are now without a win in three and at the wrong end of the table.
Having seen his side take one point from two games on the road, Speed made two changes to his side, bringing in Jean Calve and Stephen Quinn, while Watford, who arrived at Bramall Lane undefeated on their travels, were unchanged.
And United were not allowed to enjoy any home comforts as, despite Mark Yeates going close early on when he brought a fine save from Scott Loach, Watford went ahead in the 16th minute.
Lloyd Doyley advanced down the right, feeding Danny Graham who delivered an inviting cross for Sordell to slide in from close range.
It was Sordell's sixth strike of the season and his fifth in the last six games.
Speed demanded a response from his side, but they were unable to provide it as Watford continued to dominate.
Will Buckley fired a long-range effort wide of the target, while Jordan Mutch saw his shot blocked as Malky Mackay's men sought a second goal.
United offered little in the first half, with Bogdanovic, making his first home start following his summer move from Barnsley, unable to make much of an impact.
However, it was Bogdanovic's first contribution of note that almost saw United go in at the interval on level terms when his cross was met by Richard Cresswell, whose header was well saved by Loach.
And the Blades were a different proposition after the break as they pushed for a leveller.
Bogdanovic found himself with more space and had two quickfire efforts, firing over from distance with one and seeing Loach get down well to keep out the other.
Yeates drove an effort wide from 20 yards and Bogdanovic was again denied by Loach, who saved his free header after Cresswell's cross.
Watford weathered the storm, though, and could have doubled their lead but Troy Deeney shot wide from the edge of the area.
But the Hornets had done enough to win and inflicted more misery on United, who have won just one of their last five outings.