Saints were in danger of replacing their relegation rivals at the foot of the division until Danny Ings scrambled a 78th-minute equaliser and James Ward-Prowse curled home a fine free-kick five minutes later.
Ismaila Sarr's first top-flight goal looked to have set the Hornets on a course for three precious points on the south coast before the late comeback eased mounting pressure on Southampton boss Ralph Hasenhuttl.
Quique Sanchez Flores' visitors remain six points from safety, while Saints climb above midweek opponents Norwich to 18th position and are only two points below Everton following a first success at St Mary's since mid-April.
The teams began the day as the division's bottom two clubs after each enduring dismal starts to the season.
Senegal forward Sarr, recalled in place of Andre Gray following last week's 3-0 home loss to Burnley, was not so wasteful with his next opportunity and opened the scoring in the 24th minute with a maiden league goal since a reported £30million move from French club Rennes.
For all of their early possession, Saints had little attacking threat and every loose pass or poor decision increased the considerable anxiety among the restless home support.
Boos echoed around the stadium at half-time following an uninspiring opening 45 minutes which passed without a meaningful Saints chance being created.
The hosts would have been further behind had the right leg of McCarthy not repelled a stinging volley from the lively Sarr with half an hour played.
The substitutions almost had the desired effect when Boufal, who had been doubtful for this game after stubbing a toe in his kitchen at home, cut the ball back from the left and Long's shot was turned on to the crossbar by Ben Foster.
VAR then dismissed a Saints penalty claim after Moussa Djenepo tumbled under pressure from Capoue, while Ings earlier had another spot-kick appeal turned down by referee Michael Oliver after a tangle with keeper Foster.
Watford defender Craig Cathcart hooked off the line to deny Long as the pressure increased, before Saints top scorer Ings sparked the turnaround by prodding his seventh league goal of the season into the roof of the net from close range following fine work from Djenepo.
And the comeback was complete just five minutes later when Ward-Prowse curled into the top-left corner from 20 yards following Capoue's foul on Hojbjerg.
Southampton still had a major late scare to survive when Hornets substitute Gray volleyed wide deep into six minutes of added time, before the final whistle was greeted with cheers of relief.