Yohan Cabaye's second-half penalty was enough to earn Crystal Palace all three points at Vicarage Road as Watford suffered a first home defeat of the season.
In a repeat of the teams' 2013 play-off final, a penalty was enough to decide the game in favour of Palace, who move up to sixth in the Premier League following their 1-0 win.
The game was evenly matched in the first half and both sides saw efforts come off the woodwork before substitute Wilfried Zaha was brought down in the penalty area by Allan Nyom, with Cabaye converting for his second Palace goal.
After a mundane start it was the visitors who created the first meaningful chance as Brede Hangeland met Cabaye's whipped free-kick, only to see Heurelho Gomes save his header from point-blank range.
Almen Abdi was booked for tripping Yannick Bolasie and, from a free-kick in almost exactly the same position as his previous delivery, Cabaye again produced a tempting cross but Dwight Gayle could not get anything on it.
Despite having plenty of possession, it was not until after the interval that Watford came close to getting on the scoresheet when, after Abdi had been tripped by Joe Ledley, Jose Jurado stepped up and hit a 25-yard free-kick that came back off the crossbar with Wayne Hennessey beaten.
The Wales No. 1 was forced into action shortly afterwards as Craig Cathcart's long ball found Troy Deeney, whose pass was chested to Abdi by Deeney, with the full-back's driven shot not far enough away from the Palace stopper.
The visitors hit back on the counter-attack, with Gomes forced to push a deflected Bakary Sako free-kick behind for a corner before Gayle turned a cross from the former Wolves man against the frame of the goal.
Palace boss Pardew introduced Zaha from the bench after taking him off at half-time in last weekend's defeat at Tottenham.
And the winger was soon involved, bewildering Nyom with his pace before being tripped by the right-back on the edge of the Watford box.
Referee Anthony Taylor got the decision to award Palace a penalty correct and Cabaye stepped up to dispatch the kick and put the Eagles ahead.
Gayle should have wrapped up the points with a little over 10 minutes remaining but could only poke wide from close range following a Bolasie knockdown from Zaha's cross.
He came close again after staying onside and breaking clear to latch onto Bolasie's pass but, after wriggling free in the box, shot just wide.
Watford rallied at the death, but Ledley's brave block from Jurado's driven attempt summed up their afternoon and they could not find an equaliser.