Watford had won four of their last five Sky Bet Championship games but Huddersfield romped home with an impressive second-half display.
Lynch, celebrating his 200th league appearance after missing six games through injury, got the third goal with a brilliant overhead kick.
After a goalless first half, Nahki Wells put Huddersfield ahead before sub Odion Ighalo equalised with virtually his first touch.
James Vaughan made it 2-1 before Lynch’s late acrobatics sealed victory.
Huddersfield also dominated the first half, a massive improvement on last week’s dismal 1-0 home defeat to Reading when they failed to register a single effort on target.
Sean Scannell proved a threat down the right but his final delivery was lacking with keeper Heurelho Gomes having the danger covered.
With midfielder Jacob Butterfield pulling the strings for the home side, Watford never looked comfortable.
A superb through ball from Butterfield sliced open Watford but Wells, cutting inside, fired straight at Gomes.
Town had their best chance in the 23rd minute when Lynch launched an attack from the back and Wells set up strike partner Vaughan who shrugged off his marker but his lofted finish was just over the bar.
Gomes was called into action again when Butterfield pulled the ball back from the byline and he was forced to tip over Wells’ header.
Gianni Munari had Watford’s best chance with an explosive shot which keeper Alex Smithies proved equal to.
Mexico international full-back Miguel Layun, making is debut after signing from Spanish side Granada on Friday, arrowed a low drive wide from distance.
Gomes, back in the side after missing the 3-0 FA Cup defeat at Chelsea, juggled the ball and almost lost out to Wells before he was needed again to catch a Wells header which was too far out to trouble him and he smothered a Butterfield shot on the stroke of half-time to keep the scoreline goalless.
Scannell started the second half as he had the first – on the attack – but he again could not hit the target and fired wide.
Layun forced Smithies into another smart save before Wells put Huddersfield ahead in the 52nd minute.
The impressive Butterfield broke forward once more and crossed from the left for Wells to slot home from close range.
Watford made a triple substitution just past the hour – one enforced – when Gomes went off after appearing to collide with a post and was replaced by Jonathan Bond.
Ighalo joined Troy Deeney up front and had only been on the field three minutes when he levelled for the visitors when Smithies blundered to let his shot squirm through his fingers and trickle over the line.
Huddersfield made it 2-1 when Wells turned provider to cross for Vaughan to clip a clever finish just inside the post in the 77th minute, beating Bond’s despairing grasp.
Almen Abdi should have equalised again for Watford but lofted over the bar and Huddersfield could have been left to rue a chance to seal it when Butterfield unselfishly tried to pick out Vaughan who, agonisingly, could not get to the ball.
With seven minutes left Town made no mistake with Lynch’s acrobatics from Mark Hudson’s header when his overhead kick went in off the underside of the bar.