The Promotion chasing Tractor Boys hit the woodwork when Darren Bent was presented with a good chance and were frustrated by a succession of saves by Watford's rookie keeper Richard Lee.
Ipswich manager Joe Royle also contended his side should have had a first half penalty when Sean Dyche, attemptong to clear the ball, upended Bent.
But it looks fair for Ipswich four minutes into the second half when a mistake by Lloyd Doyley let in Ian Westlake who sped onto a ball from Bent and then beat the Watford keeper with a shot inside the far post.
And it got better for Ipswich as on 63 minutes they doubled their lead. Westlake was slightly fortunate when he regained a rebound of Dyche and was able to set up Bent who drilled in their second.
But that proved to be a wake-up call for Watford who had played second fiddle for over an hour but had still contrived to create a couple of excellent chances.
They were back in the hunt after 66 minutes. Neal Ardley provided the corner and Heidar Helguson leapt well above the defenders to head powerfully down and into the net.
Ipswich were under pressure and when they conceeded a free kick just outside the penalty area in a central position, Watford struck again.
Ardley, harnessing the greasy surface, sent in a low free kick which keeper Lewis Price was unable to hold and Bruce Dyer was first to the ball clipping it to Hameur Bouazza who hooked it into the net for the equaliser.
Ipswich rallied but Watford probably had the best chance when Bouazza was presented with an opening after 78 minutes but he took a touch too many and his final shot was deflected by a covering defender.