Sean Longstaff gave Newcastle the lead, but Ismaila Sarr levelled for the improved hosts after the break.
VAR then denied Watford's Joshua King a late winner for offside, while substitute Jacob Murphy squandered a great chance in stoppage time for the visitors.
On a scrappy afternoon that saw seven yellow cards handed out, Australian referee Jarred Gillett made history as he became the first overseas official to take charge of a Premier League match.
Watford, who had lost their two previous home matches, almost made the perfect start with Karl Darlow forced into a smart double save to deny Emmanuel Dennis after he was played through by King.
But, against a backdrop of more chants against manager Steve Bruce and owner Mike Ashley from the away end, Newcastle soon took the lead.
Longstaff had already taken two shots from range, but on 23 minutes, he found the breakthrough. Ben Foster got a hand to his dipping effort, but it wasn't enough to keep it out.
Darlow denied Sarr when the Senegal winger drove in from the right and unleashed a shot destined for the bottom corner, before he tipped Juraj Kucka's free kick around the post as the hosts searched for parity.
With half time looming, Newcastle squandered an excellent chance for a second. Craig Cathcart's backpass was latched on to by Allan Saint-Maximin, who looked to play in Longstaff, but it was slightly behind him and the midfielder could only shoot over.
Newcastle had more chances after the break, with Foster saving from Miguel Almiron, Joelinton and Joe Willock. They paid the price for wastefulness when Sarr levelled with a header at the back post from a corner 18 minutes from time.
Afterwards, Newcastle boss Steve Bruce said: "The game should have been put out of sight but you can't come here and dominate the way we did and create the chances we had and miss them. We nearly got punished for it at the end, which would have been totally unjust in my opinion. Our performance was terrific, we've done okay of late and haven't managed to get that first win."
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