Tommy Smith's 83rd-minute goal was enough to earn Ipswich a 1-0 win over Watford in the Sky Bet Championship at Portman Road.
The two sides were evenly matched, both enjoying chances before the Town centre-back hammered in from close range after a well-worked free-kick from the home side.
Victory moved the Tractor Boys up to fourth in the Sky Bet Championship and above Watford, who lie one place and one point behind their conquerors.
Watford should have taken the lead after just 12 minutes. A mistake from Jay Tabb was seized upon by the Hornets and Fernando Forestieri's clever through ball allowed Gianni Munari a golden chance but his shot hit the midriff of Ipswich goalkeeper Bartosz Bialkowski.
Minutes later it was the turn of Watford keeper Heurelho Gomes to pull off heroics, brilliantly tipping over Daryl Murphy's first-time volley.
The in-form striker then latched onto Kevin Bru's low cross but his snap-shot could only find the body of Gomes.
Watford's quick-footed front men were looking dangerous on the break and Forestieri was denied a certain goal by an excellent sliding tackle by Luke Chambers before the right-back was again equal to Troy Deeney's powerful drive.
After an evenly contested opening 45 minutes, Watford started the second half again looking dangerous on the counter attack while at the other end, Jonny Williams fired a low drive across Gomes' goal but wide of the far post.
Ipswich tried a different route to goal when Bialkowski's long clearance ended up to the advancing Stephen Hunt but his lob only landed on top of the Watford net with 65 minutes played.
The visitors should have broken the deadlock two minutes later when another sharp break led to Vydra drilling a perfect low cross into the path of Forestieri but he skied his first-time shot over from inside the six-yard box.
The game was too even to call with Bru firing a volley just wide of the far post with 13 minutes left on the clock before the midfielder went even closer with another long-range effort which Gomes flung himself to catch.
At the other end, Ipswich were indebted to centre-back Christophe Berra for a fabulous block to deny substitute Odion Ighalo after Deeney's cute chip over the defence.
The deadlock was finally broken seven minutes from time when a clever free kick routine ended with Bru firing across goal.
Watford could half clear the danger allowing Smith to thrash the ball home from eight yards out.
Ipswich held on during six minutes of added-on time and the closest Watford came to an equaliser was when Munari found space inside the area but his shot was blocked at his near post by Bialkowski.