A fortuitous stoppage-time equaliser from Wolves' Kevin Cooper denied Watford another deserved three points as they conceded their first goal at Vicarage Road in 405 minutes.
However, a draw was still enough to lift Ray Lewington's men up to third in the Nationwide Division One table.
After a largely even first half, the Hornets' second-half pressure paid off when skipper Neil Cox headed his side in front from Neal Ardley's corner after 66 minutes.
With only one defeat in their previous ten outings, the goal looked certain to make it eight wins in 11 for the impressive Vicarage Road side until Cooper's shot from the edge of the area took a vicious deflection off Micah Hyde, and flew past the wrong-footed Alec Chamberlain.
Watford's excellent run had been built on hard work, and this display continued their commitment and never-say-die attitude.
Although some of the players' performances may not have been at their technical best the energy levels they displayed in persistently harrying their opponents, particularly in the second half, and covering almost every inch of a saturated pitch was admirable.
Coming into the match on the back of three straight wins Wolves started brightly, but it was the home side that had the best chance in the opening 45 minutes when keeper Matt Murray did very well to push Heidar Helguson's full-length diving header over the bar.
Paul Ince did go close with a half volley in the first half, but the Hornets had other chances as well, with Stephen Glass in particular, trying his luck from distance.
Helguson was again thwarted by an excellent Murray save nine minutes after the restart when the keeper's fine block kept out the Icelandic international striker's rasping left- footed drive.
After falling behind, Wolves threw bodies forward but it looked like they would leave empty-handed after Chamberlain had been in the right place to comfortably keep out a deflected shot from substitute Dean Sturridge and an Ince header