Blackpool scored two late goals at Watford to give Paul Ince his first win in five games since becoming the Tangerines's manager on 18 February.
Cristian Battocchio chipped visiting keeper Matt Gilks to give the hosts a half-time lead.
Blackpool grew in confidence after the break and Tom Ince steered the ball in for a deserved equaliser from close in.
Gary MacKenzie then pounced on a loose ball from an Ince corner late on to end Watford's unbeaten run of seven games.
With Cardiff City out of action this weekend, Hornets manager Gianfranco Zola was left to rue several missed chances that, had they been taken, would have moved the Hornets closer to the Championship leaders. Instead, they ended the day still five points adrift in second place.
The home side were also aggrieved that referee Andrew Madley waved away strong penalty claims from Daniel Pudil and Troy Deeney in the first half.
Despite Jonathan Hogg missing a chance to open the scoring early on, Watford took a deserved lead through Battocchio on 27 minutes, who lifted the ball over Matt Gilks after latching onto a through ball from Deeney.
Fine saves from Jonathan Bond before half-time kept Watford ahead, the keeper pushing an Ince shot around the post before clawing a looping Matt Derbyshire header away to safety.
Battocchio fired wide after the break and Watford were left to regret Matthew Briggs's glaring missed header at the back post when Blackpool levelled with 14 minutes remaining.
Watford have failed to beat Blackpool in six attempts since their 2-1 win at Bloomfield Road on 21 February 2009.
Stephen Crainey crossed from the left wing, and Ince ghosted in at the near post to glance the ball across Bond into the far corner.
Worse was to follow for Watford with only two minutes left when they failed to clear Ince's corner, MacKenzie keeping his head in a crowded penalty area to secure an important three points.
Watford manager Gianfranco Zola:
"It was one of those days that has been made like it is by one man on the pitch today - and he wasn't wearing a yellow or an orange shirt.
"I would love to spend more of my time talking about somebody else and I don't like talking about the referees.
"But today he's made a difference and I feel so upset, not because of him but because of my players, because they didn't deserve to lose a game like this."
Blackpool manager Paul Ince:
"We didn't drop our heads and we kept believing we could get back into the game and that's a credit to the players.
"Towards the back end of the first half we looked like we were going to get a goal back, we played some lovely football and in the second half it was more of the same.
"If you can get the next goal, they'll get a little bit apprehensive because of where they are in the league - and it proved right."
Full Time The referee blows for the end of the match.
Foul by Nyron Nosworthy on Marko Futacs, free kick awarded. Stephen Crainey restarts play with the free kick.
Effort from deep inside the area by Tom Ince misses to the left of the goal.
The ball is swung over by Matej Vydra.
Foul by Alexandre Geijo on Barry Ferguson, free kick awarded. Gary MacKenzie takes the direct free kick.
Assist by Tom Ince.
87:39 Goal scored
Goal! - Gary MacKenzie - Watford 1 - 2 Blackpool Gary MacKenzie gets on the score sheet with a goal from close range to the bottom left corner of the goal. Watford 1-2 Blackpool.
Substitution Marko Futacs joins the action as a substitute, replacing Angel Martinez.
The ball is swung over by Matt Phillips, Mark Yeates gets a block in. Inswinging corner taken from the right by-line by Tom Ince,
Troy Deeney takes a shot. Save made by Matt Gilks.
Substitution Alexandre Geijo joins the action as a substitute, replacing Ikechi Anya.
Corner taken by Mark Yeates.
Foul by Alex Baptiste on Joel Ekstrand, free kick awarded. Free kick taken by Jonathan Bond.
Barry Ferguson produces a right-footed shot from deep inside the penalty box which goes wide of the left-hand post.
Stephen Crainey sends in a cross, Jonathan Hogg manages to make a clearance.
Substitution Joel Ekstrand replaces Daniel Pudil.
Ludovic Sylvestre challenges Troy Deeney unfairly and gives away a free kick. Mark Yeates restarts play with the free kick.
Free kick awarded for an unfair challenge on Nyron Nosworthy by Matt Phillips. Free kick taken by Nyron Nosworthy.
Inswinging corner taken by Ludovic Sylvestre, Alex Baptiste has a header from close range and clears the crossbar.
Stephen Crainey provided the assist for the goal.
75:01 Goal scored
Goal! - Tom Ince - Watford 1 - 1 Blackpool Tom Ince scores a goal from inside the six-yard box to the top left corner of the goal. Watford 1-1 Blackpool.
The ball is swung over by Stephen Crainey,
The ball is delivered by Alex Baptiste, Nyron Nosworthy manages to make a clearance.
A cross is delivered by Mark Yeates.
Mark Yeates fouled by Tom Ince, the ref awards a free kick. Jonathan Bond takes the free kick.
Substitution Matej Vydra joins the action as a substitute, replacing Fernando Forestieri.
Substitution Nathan Delfouneso comes on in place of Matt Derbyshire.
The referee blows for offside. Free kick taken by Matt Gilks.
Gary MacKenzie challenges Lloyd Doyley unfairly and gives away a free kick. Jonathan Bond takes the free kick.
Fernando Forestieri challenges Gary MacKenzie unfairly and gives away a free kick. Kirk Broadfoot takes the direct free kick.
Headed effort from inside the area by Matthew Briggs misses to the left of the target.
Barry Ferguson challenges Troy Deeney unfairly and gives away a free kick. Free kick taken by Mark Yeates.
Free kick awarded for an unfair challenge on Ikechi Anya by Barry Ferguson. Nyron Nosworthy restarts play with the free kick.
A cross is delivered by Stephen Crainey.
Unfair challenge on Tom Ince by Jonathan Hogg results in a free kick. Free kick crossed by Stephen Crainey, Matthew Briggs makes a clearance. Corner taken by Tom Ince, clearance made by Troy Deeney.
Foul by Tom Ince on Fernando Forestieri, free kick awarded. Mark Yeates crosses the ball, Cristian Battocchio has an effort at goal from outside the penalty area missing to the wide left of the goal.
Kirk Broadfoot challenges Troy Deeney unfairly and gives away a free kick. Jonathan Bond takes the free kick.
Free kick awarded for an unfair challenge on Matt Derbyshire by Mark Yeates. Free kick crossed by Stephen Crainey, Daniel Pudil makes a clearance.
Kirk Broadfoot concedes a free kick for a foul on Troy Deeney. Free kick taken by Mark Yeates.
Handball decision goes against Ludovic Sylvestre. Free kick taken by Jonathan Bond.
The referee blows his whistle to start the second half.
Substitution Ludovic Sylvestre comes on in place of Neal Eardley.
45:00 +1:01 Half time
Half Time The ref blows to end the first period.
Jonathan Hogg delivers the ball, Stephen Crainey manages to make a clearance.
Foul by Alex Baptiste on Ikechi Anya, free kick awarded. Matthew Briggs takes the free kick.
Troy Deeney challenges Angel Martinez unfairly and gives away a free kick. Stephen Crainey takes the direct free kick.
Free kick awarded for an unfair challenge on Matt Phillips by Ikechi Anya. Stephen Crainey restarts play with the free kick.
Jonathan Hogg challenges Angel Martinez unfairly and gives away a free kick. Free kick taken by Stephen Crainey, Matt Derbyshire takes a shot. Jonathan Bond makes a comfortable save. Corner from the right by-line taken by Tom Ince, Matt Phillips takes a shot. Mark Yeates gets a block in. Corner taken by Matt Phillips from the right by-line played to the near post, clearance by Troy Deeney.
Fernando Forestieri gives away a free kick for an unfair challenge on Tom Ince. Matt Gilks takes the direct free kick.
Booking Fernando Forestieri receives a yellow card for unsporting behaviour.
Tom Ince takes a shot. Save by Jonathan Bond. Inswinging corner taken right-footed by Neal Eardley from the left by-line to the near post, Jonathan Hogg makes a clearance.
Troy Deeney concedes a free kick for a foul on Tom Ince. Free kick taken by Alex Baptiste.
The assist for the goal came from Troy Deeney.
26:43 Goal scored
Goal! - Cristian Battocchio - Watford 1 - 0 Blackpool Cristian Battocchio gets on the score sheet with a goal from inside the box low into the middle of the goal. Watford 1-0 Blackpool.
Free kick awarded for a foul by Daniel Pudil on Kirk Broadfoot. Matt Gilks takes the direct free kick.
Mark Yeates takes a corner.
Corner taken short by Fernando Forestieri, The ball is delivered by Cristian Battocchio, Matt Derbyshire manages to make a clearance. Corner taken right-footed by Mark Yeates from the left by-line to the near post, clearance by Matt Derbyshire. Lloyd Doyley fouled by Tom Ince, the ref awards a free kick. Free kick crossed right-footed by Mark Yeates, Gary MacKenzie makes a clearance.
Unfair challenge on Alex Baptiste by Mark Yeates results in a free kick. Direct free kick taken by Stephen Crainey.
Free kick awarded for an unfair challenge on Matthew Briggs by Neal Eardley. The free kick is delivered right-footed by Mark Yeates from left channel, clearance by Stephen Crainey.
Ikechi Anya crosses the ball, Gary MacKenzie manages to make a clearance.
The ball is delivered by Jonathan Hogg.
The ball is delivered by Ikechi Anya, Headed effort from inside the area by Jonathan Hogg misses to the right of the goal.
Fernando Forestieri produces a right-footed shot from the edge of the area and misses to the left of the goal.
Centre by Alex Baptiste, Jonathan Bond makes a save.
Matt Derbyshire takes a shot. Comfortable save by Jonathan Bond.
Alex Baptiste crosses the ball, Ikechi Anya makes a clearance.
Troy Deeney fouled by Gary MacKenzie, the ref awards a free kick. Lloyd Doyley takes the direct free kick.
Ikechi Anya is ruled offside. Matt Gilks takes the direct free kick.
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