Fresh from saving two spot-kicks in the first half at Southampton on Saturday, Lee was at it again on the hour-mark, denying Ross McCormack to preserve the Hornets' advantage given to them by John-Joe O'Toole and Will Hoskins.
However, the home side were always up against it after Tamas Priskin had been sent off for lashing out at Darren Purse.
The Bluebirds finally made their pressure tell with a quick-fire double from Jay Bothroyd.
Watford took the lead after just two minutes when O'Toole headed in a Tommy Smith cross after the visiting defence had failed to deal with a Leigh Bromby long throw.
Bromby was the supplier again on 24 minutes, this time with a hopeful ball forward that Hoskins latched onto before hitting a speculative shot that deflected off Purse and pass the helpless Tom Heaton.
The Hornets were firmly in control of proceedings at that point but Priskin made life unnecessarily hard for his team-mates six minutes later when he got himself needlessly sent off after appearing to lash out at Purse.
It looked like the Bluebirds would get back in the game on the hour when Smith felled Peter Whittingham in the area but, fresh from saving two first-half spot-kicks at Southampton on Saturday, Lee dived low to his right to superbly keep out McCormack's effort from 12 yards.
But it was another lapse in the home side's defence that gave Cardiff their lifeline with 18 minutes remaining when Matt Sadler's slip saw the ball fall for Bothroyd, who struck a 20-yard deflected effort over Lee.
And Bothroyd was in the right place to get his team back on terms three minutes later when he turned at the far post to fire high into the net after Purse had flicked on a Paul Parry corner.
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South Wales Echo