Goals from Odion Ighalo and Matthew Connolly handed the Hornets a comfortable half-time lead, but the home side – despite losing defender Kelvin Wilson to a red card – produced a spirited fightback and clawed a goal back through Gary Gardner.
Michail Antonio missed a late sitter for the hosts, though, and Watford sealed victory when Almen Abdi added a third goal three minutes from time.
Forest ought to have gone ahead inside a minute when Chuba Akpom fed Antonio, whose mis-hit shot landed at Chris Burke’s feet and his first-time effort was smothered by Heurelho Gomes.
Watford boss Slavisa Jokanovic opted to recall Ighalo for Matej Vydra and that decision paid off inside four minutes as the Nigerian rose highest at the far post to nod in Abdi’s corner to hand the Hornets the initiative.
The visitors were enjoying much of the possession, but Forest finally made some headway after a quarter of an hour and Antonio brought a low diving save out of Gomes, who then got back up to deny Ben Osborn.
Abdi squandered a golden opportunity to increase Watford’s advantage. He played a lovely one-two with Ighalo on the edge of Forest’s penalty area and, with just Karl Darlow to beat, could only prod his effort wide.
Forest left-back Eric Lichaj met a fluffed headed clearance with a lovely volleyed effort from 25 yards that had Gomes sprawling to save.
But Dougie Freedman’s side fell two goals behind four minutes shy of half-time, the second goal coming from an unlikely source in Connolly.
The Watford defender raced forward to play in Ighalo and, after his attempt was only parried by Darlow, Connolly was on hand to turn the rebound home for his first goal in over two years.
The visitors may have been well in the driving seat, but Gomes was still the busiest man on the pitch and he was again called into action to save from Gardner.
The second half was only a couple of minutes old when Ikechi Anya’s effort was scrambled away by Darlow at the foot of his right post.
Forest’s hopes of a comeback were hit just before the hour mark when Wilson was sent off. The centre-back tangled with Ighalo near the halfway line and, as the Hornets striker trotted away, Wilson kicked out at him and was duly shown a straight red card by referee Paul Tierney.
Despite being a man down, the hosts gave themselves a lifeline through on-loan Aston Villa midfielder Gardner after 73 minutes.
Lichaj’s 40-yard dash up the pitch was halted unfairly by Craig Cathcart on the edge of the Watford box, and up stepped Gardner to crack home a stunning free-kick.
Watford captain Troy Deeney headed wide and Darlow thwarted Ighalo, before the Forest keeper pulled off a smart stop from Deeney.
The equaliser should have come five minutes from time as Gomes once more saved from Gardner, but the rebound fell to Antonio six yards from goal and, with an empty net at his mercy, he somehow toe-poked his effort wide.
And Watford took advantage of the costly miss to wrap up the points at the death when Abdi fired home after Adlene Guedioura’s thunderbolt was parried by Darlow.