Millwall's post-FA Cup hangover stretched to five games as Lee Cook's second-half goal sealed safety for Watford.
Cook fired in from 20 yards in the 70th minute, having first teed up Bruce Dyer to all but guarantee first division football for Ray Lewington's men.
But Millwall, who have failed to win since their semi-final heroics at Old Trafford, now have to rely on other teams slipping up if they are to finish the season in a top-six place.
It all started so well for the home side, who were one up after 16 minutes when Danny Dichio nodded in from Paul Ifill's cross.
But they lost direction after the break, and allowed Watford to come back into the game with a vengeance.
Watford, who were playing for their first division lives, had the ball in the net after Dyer's goal, only for it to be ruled out for offside by referee Alan Kaye.
And player-boss Dennis Wise was forced to clear Marcus Gayle's shot off the line from a corner, after the midfielder somehow shot through a scrum of bodies.
Millwall were the better team before the break, and Dichio went close with just six minutes gone but mistimed his run on to Ifill's cross and was given offside.
And Nick Chadwick could have bagged a second for Millwall but failed to connect properly with Ifill's speedy cross.
Robbie Ryan earned a rare cheer from the Millwall crowd when he beat off Paul Mayo to put Ifill through, but the winger blasted over the bar.
Dichio almost earned a point for Millwall two minutes from time but his powerful header was saved at point-blank range by veteran keeper Alec Chamberlain.
Player-boss Wise was forced into shuffling his side following injuries to Andy Roberts and Kevin Muscat.
Ryan was in an unfamiliar role at right-back, while midfielder David Livermore was at the left of defence.
And they were missing bite in midfield, with Australian midfielder Tim Cahill very quiet, being one booking away from missing the Cup final.