Having notched three goals before the international break, the Gabon international built on his impeccable performances, scoring twice but for the Gunners but that was not enough to clinch victory against the Hornets.
Pepe, meanwhile, was handed his third league start by Unai Emery but could not open his goal account despite playing for the duration of the game.
Aubameyang opened the scoring in the 21st minute of the encounter after benefitting from Sead Kolasinac’s pass.
The former Borussia Dortmund striker completed his double in the 32nd minute after he was set up by Ainsley Maitland-Niles.
After the restart, Tom Cleverley reduced the Hornets’ deficit in the 53rd minute off Gerard Deulofeu’s assist before Roberto Pereyra scored the equalizing goal nine minutes before time from the penalty spot.
Pepe, who joined the Gunners in a big-money move from Ligue 1 side Lille in the summer, will hope to get on the scoresheet in Thursday's Europa League game against Eintracht Frankfurt while Aubameyang will look to continue his impressive goalscoring performances.