An 88th-minute own goal by Watford forward Troy Deeney allowed play-off chasing Leeds to snatch a draw.
Luciano Becchio nodded Leeds in front with 18 minutes left but an unmarked Lee Hodson equalised with a header.
Danny Graham shrugged off Andy O'Brien and played in Andreas Weimann for what looked to be an 86th-minute winner.
But Deeney then bundled a cross from Barry Bannan into his own net, leaving sixth-placed Leeds two points clear of Nottingham Forest in seventh.
Simon Grayson's Leeds have only won one of their last six fixtures, but with Forest losing on Friday and Millwall defeated by Coventry on Saturday, the point against the Hornets may prove crucial.
Leeds started the match well, with Max Gradel going close, before Watford started to take control.
Graham, the Championship's top scorer, should have done better than shoot straight at Kasper Schmeichel after a slip from Leigh Bromby.
The striker then collected a pass from Deeney before delivering a cross that eluded everyone, including team-mate Marvin Sordell.
Leeds responded, with Jonny Howson having a shot blocked by John Eustace and Robert Snodgrass crossing for Gradel, who hit the bar from two yards out.
Becchio came on with 35 minutes left and had an immediate impact, flicking on a long throw that Bradley Johnson headed narrowly wide.
Don Cowie hit the woodwork for Watford before Becchio opened the scoring with a fierce header from three yards.
The Argentine missed from 12 yards with another headed chance before Cowie's cross was converted by Hodson.
Becchio was substituted after picking up an injury in a scramble that followed a Johnson header being cleared off the line, before Watford stunned Elland Road when Weimann shot home.
But Deeney's own goal ensured that the points were shared after a thrilling end to the match.