The Eagles always looked in control after a blistering start saw them score twice in the first six minutes at Selhurst Park.
The first came with just two minutes on the clock. Julian Speroni's kick was headed on by Alan Lee and Moses nodded the ball past a couple of Watford defenders before firing a left-foot shot across Scott Loach to open his account for the campaign.
Shortly afterwards Palace extended their advantage, Danny Butterfield sent in a deep cross from the right and Lee outmuscled Lee Hodson to power his header into the net.
Watford looked like they had been handed a lifeline when they were awarded a debatable penalty right on the stroke of half-time. Lee clipped the heels of Henri Lansbury, but it looked like the challenge was just outside the box.
Speroni ensured justice was done as he dived to his left to keep out Danny Graham's spot-kick.
Moses was the provider of Palace's third goal on 54 minutes. He picked up the ball in his own half and went on a surging 60-yard run, leaving Watford defenders trailing, before finding Darren Ambrose, who guided a precise right-foot strike beyond Loach for his 12th strike of what is turning out to be an incredible season.
Ambrose has scored in the last six matches - a feat last achieved by Ian Wright in the 1988-89 season.
Palace were in their pomp and another move shortly afterwards saw Moses dummy a pass, receiving it back from Ambrose before firing off a low shot which Loach tipped away for a corner.
Speroni was called into action again on the hour mark, tipping Craig Cathcart's header over his crossbar.
Tom Cleverley was at the centre of Watford's best moves and his searching crossfield pass found Heidar Helguson, but the Iceland striker volleyed wastefully over and Graham also sent an effort narrowly off target as the visitors tried to get back into the contest.
Cleverley's low drive beat Speroni in stoppage time, but his shot bounced back off the base of the post.