Deeney had powered home an 87th-minute penalty after Marcos Rojo had brought down Odion Ighalo but was left with his head in his hands after deflecting Bastian Schweinsteiger’s effort into the home side’s net.
Victory took United to the top of the English Premier League table, although cross-town rivals and previous leaders Manchester City were one of several teams who had the chance to leapfrog them in matches kicking-off later Saturday.
This win also meant Louis van Gaal’s side extended their unbeaten run in all competitions to eight games.
United had led early through Memphis Depay before Deeney’s goal ended a record of 10 hours and two minutes without conceding.
In common with all Premier League matches this weekend, the French national anthem La Marseillaise was played prior to the kick-off following the Paris terror attacks of November 13.
This was well observed although some United supporters sang “Ooh ah Cantona” to the tune, referencing their former French forward Eric Cantona.
United manager van Gaal did not include any out and out forwards in his line-up, with Wayne Rooney absent through illness.
That meant Dutch winger Depay led the line, with compatriot van Gaal looking on as his side dominated the opening exchanges.
The visitors were ahead with just 11 minutes on the clock when Depay met an exquisite Ander Herrera cross to volley past Heurelho Gomes for his fifth goal of the season.
Watford struggled to get out of their own half but United nearly gifted them a way back in with former Vicarage Road favourite Ashley Young, who had been given a good reception before kick-off, losing the ball to Etienne Capoue who in turn fed Ighalo. But the Nigerian took too much time and fired wide.
Van Gaal was forced into an early change as Herrera went off with a suspected hamstring injury to be replaced by Rojo, United switching to a back three in the process.
The visitors continued to create chances with Morgan Schneiderlin volleying over wastefully while Deeney cleared on the line to keep out Schweinsteiger’s header.
At the other end, Capoue powerfully struck over from the edge of the area but Depay came close to a second as Gomes saved well following his surging run and shot from 25 yards.
United continued to attack at the start of the second half with Gomes saving to foil Jesse Lingard, while Schweinsteiger headed over from Juan Mata’s corner.
David de Gea came to United’s rescue at the other end as he kept out Deeney’s piledriver from Ighalo’s header down.
Watford started to get closer with Ighalo unable to get proper connection from Almen Abdi’s corner with Schweinsteiger making a crucial interception.
Depay could have sealed the game for the visitors midway through the second half when his shot from the left went just wide after good work from Lingard and Mata.
Watford were very much still in the game though and it needed another good stop by De Gea to push Abdi’s effort around the post.
Deeney was then unable to direct his shot away from De Gea after Ighalo had a made a nuisance in the area, with Quique Sanchez Flores’s side taking a more direct approach.
Lingard then missed a good chance to seal the win as he failed to chip Gomes but Watford looked to have earned a point when Rojo clipped the heels of Ighalo and, from the penalty, Deeney scored his third goal of the season.
United, however, finished strongly with Gomes saving well from Chris Smalling following Andreas Pereira’s corner.
But the former Tottenham Hotspur goalkeeper could do nothing about Deeney’s deflection from Schweingster’s effort after he had kept out Lingard’s original shot.
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