The visitors led after a poor first half thanks to a Tommy Smith header, and doubled their lead on 56 minutes through Nathan Ellington.
That goal came shortly after half-time substitute Alan Lee had hit the bar for Town and, although Jon Walters pulled one back, Watford held on.
In a dire first period, there wasn't even a corner until the 32nd minute.
Ipswich cleared it, but Mathew Sadler's second corner a minute later found Smith pulling off his marker to head firmly into the net.
Ipswich struggled to get their trademark passing game going, but did come close just before the break when Richard Lee parried a fierce Walters drive.
Ellington and Alan Quinn both sent early second-half volleys off target before Watford doubled their lead 11 minutes after the break.
Smith's deep cross found sub Jordan Stewart whose volley across goal was completely missed six yards out by Darius Henderson, but Ellington was on hand to fire home.
Just before the goal, Alan Lee was desperately unlucky to see his superb lob crash back off the crossbar with namesake Richard in the Watford goal beaten.
Town keeper Stephen Bywater produced a great save to foil Ellington's header before Ipswich grabbed a lifeline on 71 minutes.
David Wright's free-kick was headed back into the danger zone by Jason De Vos and Walters prodded it home from close range.
Ipswich pressed without creating a clear chance in the remaining time, with a Walters cross deflected over the keeper and just wide of the post, the nearest they came to a point their efforts probably deserved.