Match ends, Huddersfield Town 3, Watford 1.
Championship promotion hopefuls Watford lost ground on their top six rivals as Huddersfield earned a deserved win at the John Smith's Stadium.
After a goalless first half, striker Nahki Wells slotted in from close range to put Huddersfield ahead.
A goalkeeping error allowed Watford substitute Odion Ighalo to equalise just three minutes after coming on.
But James Vaughan clipped the Terriers back ahead, before defender Joel Lynch netted with a brilliant overhead kick.
It ensured former Brighton and Nottingham Forest player Lynch, who returned to the Huddersfield side after a six-match absence through injury, marked his 200th career league appearance in style.
More importantly, the acrobatic finish helped move Chris Powell's side further away from the relegation zone.
Huddersfield, who climb up to 15th, controlled the majority of the match as Watford failed to find their rhythm and dropped to sixth.
The Yorkshire side had only won one of their previous five matches, but produced a performance much improved on last week's 1-0 home defeat by Reading when they failed to muster a shot on target.
Midfielder Jacob Butterfield was behind their best attacking play, setting up first-half chances for Wells and Vaughan which drew smart saves from Hornets keeper Heurelho Gomes.
Watford had been in excellent form - winning four of their previous five league matches - before suffering a 3-0 FA Cup defeat at Premier League leaders Chelsea last weekend.
And they slipped to a second straight defeat as Huddersfield produced a superb second-half display.
Butterfield burst forward to supply a left-wing cross for Wells to score Huddersfield's opener, although Watford did level when home keeper Alex Smithies allowed Ighalo's shot to squirm through his grasp and trickle over the line.
Wells provided the cross for strike partner Vaughan to tuck the Terriers back ahead, before Lynch's stylish finish clinched the three points.
Huddersfield manager Chris Powell:
"It was a really good performance and while results have generally been good at home we need to play with the intensity we showed today.
"Watford are a top-six side but we have played well against the better sides such as Brentford and Notts Forest.
"We have taken seven points from nine now and we are bouncing back."
Watford head coach Slavisa Jokanovic said:
"We did not deserve anything from the game. We did not achieve the high levels that we needed to.
"We only played for about 10 minutes and you have to play for the whole game."
- 4HudsonBooked at 46mins
- 17RobinsonBooked at 65mins
- 9VaughanSubstituted forLolleyat 90+2'minutes
- 1GomesSubstituted forBondat 63'minutes
- 31HobanBooked at 16mins
- 7LayúnBooked at 90mins
- 18PudilSubstituted forAnyaat 64'minutes
- 20VydraSubstituted forIghaloat 64'minutes
- Chris Kavanagh
- Shots on Target
Second Half ends, Huddersfield Town 3, Watford 1.
Miguel Layún (Watford) is shown the yellow card for a bad foul.
Foul by Miguel Layún (Watford).
Jacob Butterfield (Huddersfield Town) wins a free kick in the defensive half.
Substitution, Huddersfield Town. Joe Lolley replaces James Vaughan.
Foul by Tommy Hoban (Watford).
James Vaughan (Huddersfield Town) wins a free kick on the left wing.
Delay over. They are ready to continue.
Delay in match (Watford).
Attempt missed. Daniel Tözsér (Watford) left footed shot from outside the box misses to the right.
Attempt saved. Jacob Butterfield (Huddersfield Town) left footed shot from outside the box is saved in the centre of the goal.
Goal! Huddersfield Town 3, Watford 1. Joel Lynch (Huddersfield Town) left footed shot from the centre of the box to the top right corner. Assisted by Mark Hudson with a headed pass following a corner.
Corner, Huddersfield Town. Conceded by Ikechi Anya.
Attempt missed. Nahki Wells (Huddersfield Town) right footed shot from the centre of the box is high and wide to the right. Assisted by James Vaughan with a headed pass.
Hand ball by Miguel Layún (Watford).
Foul by Miguel Layún (Watford).
Jack Robinson (Huddersfield Town) wins a free kick in the defensive half.
Goal! Huddersfield Town 2, Watford 1. James Vaughan (Huddersfield Town) right footed shot from the centre of the box to the bottom right corner. Assisted by Nahki Wells with a cross.
Attempt missed. Almen Abdi (Watford) left footed shot from the centre of the box is too high. Assisted by Odion Ighalo.