The Hornets skipper slammed home a first-half penalty and Gerard Deulofeu added a late second to sink West Ham 2-0 and scupper their bid to win five matches on the spin.
Deeney, relishing his role as pantomime villain at the London Stadium, celebrated his successful spot-kick by punching the corner flag out of ground and goading the home supporters.
The 30-year-old certainly seems to relish playing against West Ham. Two seasons ago he accused the Hammers of "trying to mug us off" with their showboating after he inspired Watford to come from two goals down and win 4-2.
Fortunately only one home supporter reacted to his 'exuberant' celebration, and the paper cup that was thrown towards the striker fell a long way short.
West Ham, looking to climb into the top six themselves, had chances to equalise, but Michail Antonio twice hit the woodwork before Deulofeu finished them off three minutes from time.
Deeney's big moment arrived on the half hour, when Robert Pereyra wriggled free in the area only to be caught by a clumsy late challenge from Fabian Balbuena.
Lukasz Fabianski had saved Deeney's previous three penalties, but he had no chance with the fourth, the striker blasting into the top corner.
Once the celebrations had died down West Ham almost equalised when Javier Hernandez met Antonio's knockdown, but Ben Foster scrambled the Mexican's volley wide.
Moments after the break Antonio went even closer, getting a faint touch to a Robert Snodgrass corner only to glance the ball against the far post.
Foster kept out a shot from Arthur Masuaku before Hernandez came up with a horrible miss, scuffing the ball straight at Foster from just six yards out.
Abdoulaye Doucoure thought he had doubled Watford's lead from Pereyra's low cross, but Fabianski made a fine point-blank save before the Hammers goalkeeper also denied Deeney a second.
Home boss Manuel Pellegrini sent on Andy Carroll in a bid to beef up his attack and the striker went close with an attempted overhead kick.
In a frantic finish Hernandez looked certain to equalise, but Doucoure nicked the ball away from him before Foster kept out a deflected Snodgrass header and Antonio nodded the rebound against the crossbar.
And, with West Ham piling forward, they left the inevitable gap at the back and Deulofeu punished then with a low finish across Fabianski.