The Reds are two points adrift of Manchester City in second place, having won nine and lost none of their 12 opening fixtures.
Having won nine of their last 11 encounters with this opposition, they are 8/15 (1.53) favourites with William Hill to come out on top at Vicarage Road.
However, Javi Gracia's men have won five of their seven home games in the league so far, and can be backed at 5/1 (6.00) to pull off an impressive victory in this one.
Just one of the last 19 meetings between this pair has resulted in a draw, but you can get odds of 10/3 (4.33) on them cancelling each other out on this occasion.
Sebastian Prodl, Daryl Janmaat and Tom Cleverly remain unavailable, although the latter two have returned to full training following long-term injuries.
Goals at both ends
The sides played out a memorable 3-3 draw when they last met at this ground, with Jurgen Klopp's team twice coming from behind before conceding a last-minute equaliser.
While their improved defensive record this campaign makes another six-goal thriller unlikely, it is not unrealistic to expect a fair amount of action at both ends.
Despite conceding just a single goal in six league home games so far, Liverpool have only kept one clean sheet in their last seven away fixtures in all competitions.
Having failed to score in just two of their 13 home games under Gracia, odds of 8/11 (1.73) offer solid value on Watford joining their high-flying visitors on the scoresheet.