The 35-year-old was recently named as Steve Cotterill's successor at the Fratton Park helm, but could not spur Pompey to their first away victory of the season.
Watford looked impressive from the outset in Saturday's Championship clash and were set on the way to a third victory in four matches inside two minutes when Michael Kightly netted his first goal in two and a half years.
The home side dominated the first period and deservedly doubled their advantage just before half-time, with Marvin Sordell volleying home exquisitely from Mark Yeates' corner.
Watford continued strongly in the second period and only wayward finishing prevented them extending their lead further against a lacklustre Portsmouth, who failed to test goalkeeper Scott Loach with any regularity.
Appleton brought in Joel Ward for on-loan Abdul Razak, while Hornets boss Sean Dyche also made one change.
Kightly replaced Troy Deeney in the starting line-up and the change paid dividends within two minutes.
The on-loan Wolves winger found space on the left flank and put the home side ahead with a speculative drive that beat Stephen Henderson from 25 yards.
The visitors pushed forward in numbers, but could have soon conceded a second if Prince Buaben had shown more composure in front of goal.
Kightly then hit the side netting as Watford pressed, before Sordell blasted over and Henderson tipped over Yeates's cross-cum-shot.
While Pompey looked poor in defence, they were comfortable in possession and only a last-ditch challenge from Nyron Nosworthy thwarted Luke Varney when clear on goal.
Erik Huseklepp then saw his cross somehow deflected behind before Watford doubled their advantage just before the break as Sordell caught Yeates's corner on the volley.
Dyche's men continued in the ascendancy after the break, with Buaben seeing a shot deflected over before Sordell came close.
The match began to slow as the half wore on, with Greg Halford curling a free-kick just wide before Yeates almost deceived Henderson with a set piece of his own.
Watford were still edging proceedings and Sordell missed a clear-cut chance in the 69th minute when he flicked a header over from close range.
Luke Varney's flicked header forced Loach into his first save of the match with less than 10 minutes remaining, and Loach was again called into action to thwart a Huseklepp free-kick in the 90th minute, but that was as good as it got for the 1,727 visiting fans.