Hull snatched the lead with the first attack of the game as Kevin Ellison and Green combined to play in Barmby, who smashed his side into the lead on his return to the starting 11 with a powerful right-footed shot.
The Tigers' lead was cancelled out within seconds as a corner from Watford's Ashley Young was met by a thumping header from Mahon into the left-hand corner of the net.
It was end-to-end stuff and Hull nearly restored their lead on 15 minutes through a deflected Curtis Woodhouse shot from the edge of the area which was cleverly tipped over by Hornets keeper Ben Foster.
Watford nearly took the lead themselves as clever play from Anthony McNamee down the left resulted in a chance for Spring, whose shot was deflected inches wide of Boaz Myhill's left hand post.
Just before the break Watford found themselves in front as a long throw from Mahon was flicked on by Marlon King and Spring found himself with another chance inside the area. This time he made it count as he smashed the ball into the roof of the net.
Hull went on the attack in the second half and a great ball from substitute Craig Fagan and a neat pass from Barmby left Green with a straightforward chance but he could only smash it into the chest of Foster.
Green had the chance to equalise from the penalty spot on 72 minutes as Clarke Carlisle brought down John Welsh on the right hand side of the box. To the despair of the Hull fans, Green sent the ball high over the Watford crossbar from the spot.
Hull again could have equalised minutes later as Barmby ran onto a ball inside the area only to smash it straight at the Watford keeper.