Alexis Sanchez saw a goal ruled out for offside on 24 minutes but United soon opened up a two-goal cushion as Lukaku and Smalling scored within the space of three minutes.
The Hornets came from behind to beat Tottenham Hotspur a fortnight ago and showed similar spirit in the second period as Andre Gray halved the deficit on 65 minutes.
Jose Mourinho's men sat back to protect their lead and closed out successive victories despite losing midfielder Nemanja Matic to a second yellow card in stoppage time.
Relive how the action unfolded with Sports Mole's minute-by-minute updates below.
4.30pmJose Mourinho suffered a rather embarrassing fall over the international break, so the Portuguese will be hoping that his Manchester United side don't follow suit by tripping up at unbeaten Watford this evening. The Hornets are buzzing and defending a 100% start to the season. Here come the teams...
4.36pmMourinho makes just one change from the XI that started the win over Burnley a fortnight ago, choosing not to risk Luke Shaw who suffered a nasty looking head injury on international duty but is said to be recovery well. Ashley Young comes in at left-back against the club where he started his career.
4.38pmMarcus Rashford kickstarted his season with two goals for England last week but starts a three-match domestic suspension today following his sending off at Turf Moor. Mourinho launched a strong defence of his development of Rashford at his press conference but can't call on him this evening.
4.40pmUnited's disappointing summer business is summarised with the fact that Mourinho has put his faith in the often maligned Marouane Fellaini ahead of Fred - their only notable acquisition in the transfer window. Fellaini has earned this start after a good showing in holding midfield against the Clarets.
4.42pmChris Smalling and Victor Lindelof is the centre-back partnership with Eric Bailly continuing to be myteriously ignored. Most United fans would argue that the Ivorian is their best defender but Mourinho has wasted no time in restoring Smalling, and seems to be preferring Lindelof as it stands.
4.44pmWatford boss Javi Gracia has the luxury of naming an unchanged team for the fifth successive game since the start of the season. Ex-Manchester Untied goalkeeper Ben Foster has been a shrewd addition but otherwise it is much of the same team which was nearly dragged into relegation trouble last term.
4.44pmWatford boss Javi Gracia has the luxury of naming an unchanged lineup for the fifth game in succession since the start of the season. Ben Foster, once of Man United, has been a shrewd addition in goal but otherwise it is much of the same team which was nearly sucked into relegation trouble last term.
4.46pmWinger Gerard Deulofeu remains out with a hip issue while another former United player Tom Cleverley is a long-term absentee. Nathaniel Chalobah is on the bench again today after making his comeback from a 10-month layoff as a substitute in the come-from-behind win over Spurs last time out.
4.48pmPaul Pogba will have his work cut out in midfield today with the Watford pair of Abdoulaye Doucoure and Etienne Capoue proving a match for anyone so far this campaign. Roberto Pererya, who has three goals to his name already this season, and Will Hughes, add some creativity to that dynamism.
4.50pmPererya and Hughes drift inside from the wings to take up dangerous central positions and that leaves room for the full-backs to get forward on the overlap. Jose Holebas has been involved in more goals this season than any other player - a goal and four assists - and Daryl Janmaat has been a great outlet too.
4.52pmThe Hornets have won the opening four league games of a season for the first time ever in the top flight, and just the second time since 1988-89. They have made a habit of making fast starts in recent years but have then tailed away after Christmas. Do they have the staying power to sustain a top-half push?
4.54pmFollowing their Spurs scalp, Watford have won four consecutive home games in the top flight for the first time since December 1986. In fact, they have won 23 points at home since head coach Javi Gracia took charge in February - more than any other Premier League team during that period.
4.56pmMourinho was hesistant to praise today's opponents for their impressive start and highlighted that their position in the table is skewed by the fact that four of their opening five games have been at home. The Hornets did only win four away games throughout last season, and not since November.
4.58pmWhile it has not stopped them from racking up the points, Watford have only kept one clean sheet in their last seven Premier League games - on the opening day of the season against Brighton & Hove Albion. Gracia will hope that finally bringing consistent team selection to the club will help in that regard.
5.00pmThe Hornets have been particularly leaky in games against top-six opposition. In their 12 matches against the Premier League's elite last season they conceded 34 goals, which accounts for over half the goals that they conceded throughout the whole of the 2017-18 campaign.
5.02pmOne of Gracia's biggest contributions so far has been making club captain Troy Deeney a focal point of the team again. The striker was a peripheral figure under Walter Mazzarri and Marco Silva but is back to his bullish best now and is clearly enjoying playing in a two with Andre Gray.
5.04pmDeeney will fancy his chances of unsettling Victor Lindelof this evening. The Swede has typically struggled with the Premier League's more physical forwards, and they don't come much more physical than Deeney, who has two goals in four appearances so far this campaign.
5.06pmJose Mourinho is used to making headlines, but this week it was for a strange reason! The Special One can often take himself too seriously but, in fairness, laughed off the fall by saying that he tripped deliberately to give the media something to write about him during the international break.
5.08pmWith Mourinho under third-season scrutiny and having overseen an indifferent start to the campaign, he will be happy to be heading to a happy hunting ground this evening. The Portuguese tactician has won five of his six Premier League clashes with Watford, including the last three in a row.
5.10pmAnother Red Devil who enjoys playing Watford is Alexis Sanchez. The Chilean has recorded three goals and three assists in his five Premier League appearances versus Watford, although those all came in his Arsenal days and he is yet to find the form of his Gunners peak with United.
5.12pmIn coming from behind to beat Spurs, Watford ended Tottenham's run of 48 games unbeaten when scoring first. The Red Devils are in the midst of a simiar run, winning the last 24 Premier League matches in which they've scored the opening goal. Can Watford claim another scalp tonight?
5.14pmRecent history is not in Watford's favour, however, as they have lost 14 of their last 15 games in all competitions with Manchester United. That being said, that win did come during Mourinho's tenure at Old Trafford with a 3-1 home triumph during the Special One's first season in charge of the club.
5.16pmThe Red Devils won this fixture 4-2 last season, with former Hornet Ashley Young scoring twice. The 33-year-old converted full-back scored 22 times for Watford after graduating through their academy before leaving for Aston Villa upon the Hornets' relegation back to the Championship in 2006.
5.18pmJust over 10 minutes until kickoff at Vicarage Road. Should Watford cause a surprise this evening they would keep pace with Chelsea and Liverpool, both of whom won today, at the top of the table with a 100% record. A win for United could lift them as many as five places to sixth in the standings.
5.20pmMourinho's press conferences are blockbuster these days and this week was no different. A question about Rashford's play time riled the Portuguese and this is what BBC Sport quotes him as saying:
"I think I can expect that I'm going to be highly criticised for not playing him because some of the boys [pundits] are really obsessed with me and some of them, they have I think a problem with some compulsive lies. The ones that wake up in the morning and the first thing that comes into their mind is Jose Mourinho and Manchester United, I feel sorry for them."
5.22pmJavi Gracia has had no such dramas at the moment and is focussed on the football, telling BBC Sport: "We are in a good moment, we are enjoying it, we know in the future things may change but this is a good moment for us. Playing at Vicarage Road we feel strong and we think we are able to beat all the teams."
5.24pmSTAT:Troy Deeney has scored a penalty past David de Gea in each of Watford's last three encounters with United. However, it is the Red Devils who have benefitted from penalties this season having been awarded a spot kick in three of their opening four matches.
5.26pmGracia has paraded the Premier League Manager of the Month trophy to the crowd prior to kickoff. He will hope that accolade does not act as the burden it has a reputation for being.
5.28pmPREDICTION: Win, lose or draw, United are in for a difficult evening at Vicarage Road where Watford's recent record has been so impressive. It would be some achievement to knock off Spurs and United in successive games but I think Mourinho will make sure his team aren't beaten. 1-1 draw.
1 minThe action is underway at Vicarage Road which is full to capacity and in full voice. United are in their changed white strip and Mike Dean is our referee this evening, in his 19th season as a top-flight official.
3 minCHANCE!Romelu Lukaku really should do better with an early opening. Having done well to bring down a ball over the top from Young, the Belgian is hesitant in shooting and eventually decides to try to go around Ben Foster who sweeps up the ball.
5 minDoucoure tries something spectacular from 35 yards out, to the left of centre and slices his shot horribly wide. The midfielder is capable from distance though so United need to be careful about inviting him to shoot.
7 minUnited counter with numbers and eventually the play is shifted out to the left where Young's disappointing cross is easily gathered at the near post by Foster. Lukaku and Lingard were waiting for a better delivery.
9 minFellaini has taken up the same deep-lying position that he did against Burnley, allowing Pogba and even Matic more freedom to move forward. I'm not sure the Belgian is a good enough passer of the ball to play that role. He has always been at his best when he gets in the box and makes a nuisance of himself.
11 minIt has been an even and enterprising start from both sides without it yielding a clear-cut chance. Watford seem content to mostly play on the break and are well suited with ball carriers such as Doucoure, Janmaat and Pererya.
13 minSAVE! Young gets to the left byline but instead of whipping a cross into the box he cuts the ball back to Pogba, who feigns to shoot on his right before letting fly powerfully on his left, with Foster getting everything behind it.
14 minSHOT! At the other end, Hughes gets away from Fellaini and Matic with some silky feet and gets a shot away from 20 yards. The England Under-21 midfielder didn't quite catch it right though and De Gea saves low to his left.
16 minSAVE! The chances are coming thick and fast now, with Deeney now testing De Gea with a vicious shot from just inside the box. The striker chested a long ball down from Doucoure and eventually got the ball back via a Fellaini mistake, but Spanish Dave was equal to his effort.
18 minUnited are stroking the ball around the back comfortably but so far it is Watford who have been more penetrative.
20 minLukaku makes a run into the left channel and is found by Pogba but the offside flag goes up. The Belgian is spending most of the time over on the left whereas Lingard is playing off the right. The England midfielder is always at his most dangerous when he's making runs off Lukaku.
22 minGood play by Matic who gives an isolated Lukaku an option and carries the ball into the left side of the area. Capoue reads the danger and gets back to intercept the cross, with Lingard having made a run in from the right. You can always count on Lingard to get into the box - one of his best assets.
24 minDISALLOWED GOAL! It is just not quite going Sanchez's way in a United shirt. Pogba floats in a cross which the South American brings down on his chest and volleys past Foster, only for the offside flag to be raised.
26 minPererya has been fairly quiet in the opening stages, with Valencia a tough one-on-one opponent. The Watford midfielder gets half a yard on the Ecuadorian who tackles at the expense of a corner.
28 minThe Hornets are a threat from dead-ball situations, scoring two headers against Spurs last week. So far today the delivery hasn't been good enough to trouble United with the latest cross sent way too deep.
30 minLovely interplay from Watford around the edge of the box tees up Doucoure to run onto a first-time shot which is blocked by Fellaini. That is a 50-50 that neither will be backing out of!
31 minSAVE! Sanchez shows a turn of pace and great feet to get past Kabasele and into the area, but he is forced a little wide and Foster gets his angles right to push the Chilean's shot around his post.
33 minHughes has space to turn on the edge of the box and get a shot away but again United get a block in through Lindelof. Watford get four or five players forward on every attack - and the full-backs often join in too - which is brave but it does leave them vulnerable to a possible counter.
34 minYELLOW CARD! Capoue takes a caution for bringing down Lingard on one of those such counter-attacks.
35 minNot his most glamorous finish, but Lukaku has given United the lead here - off his stomach! Watford fail to clear from a corner and when Young recycles the ball, he picks out Lukaku in the middle and he actually adjusts his body well to turn the ball past Foster with his abdomen. They all count!
36 minYELLOW CARD! Holebas becomes the second Watford player to enter the book as he is penalised for dissent. Deeney was also protesting with Mike Dean in the aftermath of the goal, possibly arguing offside or handball against Lukaku, neither of which do Watford have a legitimate claim for.
38 minUnited have hit Watford with two goals in three minutes, and this is a proper striker's finish from Chris Smalling of all people. As he did for the first goal, Fellaini makes a nuisance of himself, winning the first ball in the air and teeing up Smalling who smashes home expertly with a swivelling volley.
40 minThis has been an excellent passage of play from the visitors, who have scored twice and could have had more with Pogba twice threatening in between the two goals. The Frenchman had Foster scrambling with a ping from range, and may have had the goalkeeper beaten with a first-time shot from Young's corner which was blocked by the head of Capoue. United have really turned it on in the last 10 minutes.
42 minMourinho showed a rare smile on the dugout after that second goal, celebrating with his two assistants what was surely the product of a training ground corner routine. Fellaini peeled off deep and Smalling won the second ball. Managers are always so satisfied when a plan like that comes together.
44 minWatford might feel hard done by having arguably enjoyed the better of the opening 30 minutes. It has been defensive basics that has let them down and they have a mountain to climb in the second half.
45+1 minCHANCE! United should have put this game to bed on the stroke of the break, stringing together a lovely move with culminates in Lingard picking out the run of Pogba at the back post, but the Frenchman cushions his volley straight at Foster.
6.24pmThat is more like it from Manchester United. They had to compete with Watford in the opening half-an-hour but dug in and then went through the gears as the second-half developed and have earned themselves a 2-0 advantage at the break.
6.26pmFellaini has again been preferred to Fred today and United used his aerial prowess in the build-up to both goals. Watford were not afraid to go long to Deeney in the early stages but have been undone by not winning their headers at the other end.
6.28pmThat is Lukaku's 20th Premier League goal for United, in his 39th appearance. In the Premier League era, only three United strikers have reached that figure in fewer games - Van Persie, Van Nistelrooy and Yorke.
6.30pmChris Smalling is turning into a useful goalscoring outlet for the Red Devils as well. The defender has four in his last 12 Premier League games, having managed eight in his previous 173 outings for United.
6.32pmWatford have only lost twice at home in the calendar year but they really have their work cut out if they are to rescue something from this game. Pererya and Hughes have been bright in flashes but it will take something very special for them to rescue their unbeaten record from this position.
6.34pmThe players are out in the field and ready to get going but Mike Dean is late coming out of the tunnel to resume the action. The cult hero referee gets a sarcastic cheer when he eventually appears.
46 minKICKOFF: Mike Dean has put down his second cup of tea and blown the whistle to get the action back underway...
48 minWatford have come out fighting in this second half, seeing all of the ball so far but their delivery is letting them down at the moment.
50 minThere have been good signs today in regards to Pogba and Sanchez's form. Pogba in particular has been very involved, switching the play effortlessly and taking on plenty of long-range shots.
52 minPererya gets away from Lingard way too easily on the left byline but Smalling comes across to cut off the Argentine. That was very lazy defending from Lingard and he was lucky that the angle was against the Watford man otherwise he could have got a shot way.
54 minDeeney is continuing to win all of the knockdowns but Watford have not been able to make the most of them. Smalling has been well positioned more than once to intercept the second ball.
56 minA clumsy foul from Valencia gives Pererya a free kick that is within range but a touch left of centre than ideal. The winger gets it up and over the wall but doesn't have the dip to trouble De Gea.
58 minKabasele tracks Lukaku all the way into the right channel, holds up his Belgian compatriot and stands firm to make a strong tackle. The Watford defender won't be far away from the international squad based on his early-season form.
60 minAt the moment the Hornets look a bit one-dimensional. They have lots of players who like to run at the opposition and I would like to see Doucoure in particular be a little more dynamic when he gets the ball.
62 minHolebas whips a wicked corner right down the throat of De Gea and Smalling has to make an excellent clearing header over his own crossbar to rescue his goalkeeper who was surrounded by yellow shirts.
65 minThe Hornets are rewarded for their determination and find a way back into the game through Andre Gray! It is a lovely finish from the striker for his second goal of the season, letting Doucoure's pull back run across him and thumping it into the top corner to leave De Gea with no chance. Game on!
67 minGracia deserves plenty of credit for instilling a hardened spirit into this Watford group. It wasn't always that way - they rolled over for the top teams towards the end of last season - but there has been no sign of that tonight, and the Vicarage Road crowd is firmly behind them as they chase another comeback.
69 minVery nearly for Watford, as Doucoure fizzes an incisive pass into the feet of Gray, who in turn tries to feed the run of Hughes but Lindelof, who has endured a shaky last five minutes, makes the interception.
71 minSUBSTITUTIONS: Each manager makes a change with Gracia swapping Janmaat for Femenia at right-back, and Mourinho introducing forgotten man Martial in place of Lingard, possibly with an eye on killing the game off on the break.
73 minMartial's first contribution is to give the ball away when he had the opportunity to run at Holebas. Mourinho is straight off his bench lecturing the Frenchman who is not in his manager's good books anyway.
75 minDoucoure carries the ball 50 yards after dispossessing Pogba on the edge of the box. He passes the ball onto Pererya and soon gets it back, but scoops a 25-yard shot horribly into the stands.
77 minCritical intervention from Cathcart as he slides in just as Sanchez was getting ready to pull the trigger. Lukaku laid the ball perfectly into the Chilean's path after Valencia's cross designed to send the Belgian through on goal was played a yard or two behind him.
79 minWho have Watford got to come off the bench who can give them something a little extra in the final 10 minutes? Isaac Success, a scorer in the League Cup win over Reading in Augsut, is the most likely option but there is not much inspiration for Gracia to turn to.
81 minKabasele follows Cathcart's example with a superb last-ditch challenge to thwart Martial who was through on goal.
83 minWatford are enjoying most of the ball and the territory now with United dropping deep to protect their lead. They do look a threat on the counter though and it wouldn't be a surprise if United get the next goal.
84 minSUBSTITUTIONS: Mourinho takes more action to protect this lead by sacrificing Sanchez for McTominay. Gracia makes another change, giving a Premier League debut to young Italian full-back Adam Masina in place of Holebas.
86 minGray and Deeney get in each other's way on the edge of the box and a shooting opportunity goes begging.
88 minSUBSTITUTION: Gracia throws on an extra attacker for the final few minutes as Success replaces Cathcart.
90 minSHOT! Doucoure catches a left-footed swing really nicely but De Gea shows great handling to prevent Gray from pouncing on a follow-up.
90+1 minSuccess dances through Matic but takes one touch too many and Fellaini intervenes before he can get a shot away.
90+2 minSUBSTITUTION: Mourinho winds down the clock by swapping Bailly for Valencia. United's captain wants to really push things by taking his captain's armband over to Smalling but Mike Dean plays courier.
90+3 minRED CARD! Matic is off for a second yellow card, wiping out Hughes by the right touchline. United will have to survive a last-gasp free kick without the Serbian who will now also be slapped with a one-man ban.
90+4 minSAVE! Hughes whips in an inviting ball which Kabasele gets a firm header to but De Gea salvages the three points for United with a crucial reflex save.
7.30pmMatic's red card is too late to inspire another Watford comeback as United hang on for a 2-1 win and back-to-back victories. The Hornets gave as good as they got for long periods but were undone by a quickfire first-half double from Lukaku and Smalling. Their 100% record is gone but they remain in the top four.
7.32pmThat's it from our coverage from Vicarage Road. You can read our match report on the action here. Thanks for joining us this evening. Until next time, goodbye!