It was sweet revenge for Nigel Pearson's side, who were at Vicarage Road for the first time since their playoff semi-final heartbreak in May.
Here, Sports Mole takes a closer look at a convincing win for Leicester.
On target 5
On target 4
Was the result fair?
Without a doubt. The above stats may suggest that Watford had more shots and possession but Leicester's openings were clearer and, in all honesty, they could have had more than three. Yes, Watford should also have had at least one but they were wasteful.
After a strong start to the season, the Hornets have been in inconsistent form of late and today's thumping was a second-straight defeat at home. Even more worryingly, both Derby and Leicester scored three goals in those victories and that is something that simply should not be happening at home if you are going to push for promotion. Perhaps it is time for Gianfranco Zola to ditch the 3-5-2 system that was often unlocked by Leicester's swift counter-attacking today.
The Foxes' victory capped a fantastic week of three victories, one of which was a memorable defeat of Fulham in the Capital One Cup. Nigel Pearson's side looks unstoppable at the moment and you would not say that it's down to one or two star players. The whole team looks so confident and quality shines through in every position.
Sports Mole's man of the match
Anthony Knockaert: It was a huge afternoon for the Frenchman, returning to the ground of surely the lowest point of his career. Knockaert was the man whose penalty was saved by Almunia before Watford streaked down the other end and snatched last season's playoff semi-final. Today, Knockaert made amends for that miss with a classy display that was capped with a goal.
Has to go to Almunia for hooking his left-footed clearance straight into the face of Wood. The ball could have gone anywhere and it wasn't unlucky for Watford that it flew in, but it should have never been allowed to happen.
Although there was a glut of goalmouth action, referee Roger East actually had quite an easy game to officiate with the two teams going at it.
Watford: The Hornets can get back to winning ways when they travel north to Middlesbrough next Saturday.
Leicester: Nigel Pearson's side, meanwhile, could go top of the table if they beat East Midlands rivals Nottingham Forest.