Watford substitute Andre Gray scored a stoppage-time winner as Brendan Rodgers's reign at Leicester City began with a defeat.
The Hornets went ahead in only the fifth minute, when a free-kick from Gerard Deulofeu was glanced in by Troy Deeney for his first home goal since September.
In the second half, Kasper Schmeichel made a brilliant save to push away a powerful effort from Abdoulaye Doucoure.
Jamie Vardy equalised for Leicester on 75 minutes after he latched on to a pass from Youri Tielemans to finish past Ben Foster.
But in the second minute of stoppage time, Watford claimed victory when Gray calmly slotted beyond Schmeichel.
Victory leaves Watford eighth on 43 points, level with Wolverhampton Wanderers in seventh. Leicester remain 11th on 35 points.
See: Watford report | Leicester report
Next fixtures
Watford: 9 March v Man City (A)
Leicester: 9 March v Fulham (H)