Town have not experienced such a disastrous run of results since 1994-95, when they fell to eight consecutive losses in the top flight including a 9-0 mauling at Manchester United.
The writing was certainly on the wall going into what was by and large an evenly-contested and open encounter, with the Suffolk club having failed to win any of their last 13 meetings with Watford.
That sequence looked under threat as skipper Keith Andrews headed Town into the lead on the stroke of half-time with his sixth goal of the season.
But, after Mark Yeates had seen his free-kick hit the crossbar, Marvin Sordell - guilty of a glaring first-half miss - levelled matters from the penalty spot having been brought down by Ibrahima Sonko.
And the transformation was quickly complete as Troy Deeney capitalised on Lee Martin's defensive hesitancy, ensuring Ipswich threw away a winning position for the third time in four games.
Town boss Paul Jewell, whose future is under threat, made four changes for the second successive match, goalkeeper David Stockdale, defender Sonko, midfielder Martin and striker Jason Scotland coming in.
Watford, with just one defeat in their last six going into the game, showed one alteration from their midweek draw against Bristol City, fit-again leading scorer Sordell replacing Craig Beattie.
And it was Sordell who spurned a glorious chance to put the visitors into a 15th-minute lead when he cut inside and blazed well over the crossbar from 12 yards.
Town's first opening came midway through the half as Hornets goalkeeper Scott Loach blocked Danny Collins' header from Martin's corner and Sonko blazed the rebound off target from close range.
Neither stopper had been called into any real save of note as half-time approached but there was nothing Loach - an Ipswich supporter who began his career in the club's Academy - could do about the game's opener.
Daryl Murphy sent over a cross from the left and Andrews was on hand to head home from close range.
Stockdale was called into action shortly after the restart to tip Nyron Nosworthy's effort over before Yeates saw his curled free-kick from distance hit the bar.
Ipswich midfielder Lee Bowyer had sent a teasing ball across the six-yard box at the other end in between those two efforts as the excitement went from end to end.
Martin then sent in another cross which was missed by Jason Scotland while Aaron Cresswell saw his set-piece well parried by Loach.
The next goal could have gone either way and, decisively, it was the Hornets who grabbed it in the 70th minute as Sordell converted from the spot having been brought down by Sonko.
And matters soon went from bad to worse as Martin dallied on the ball in defence and, having been caught out, Deeney was happy to capitalise.