Pierre-Emerick Aubameyang scored twice but we were left kicking ourselves after letting a two-goal lead slip to leave Watford with just a point.
With Alex Lacazette ruled out until the start of October, the Gabon international will be expected to shoulder much of the goalscoring burden – and after a quiet opening, he suddenly burst into life midway through the first half.
The hosts had had the better of the early knockings, and we were indebted to Bernd Leno for a fine save to deny Tom Cleverley before Jose Holebas sliced a shot over when well placed.
We made Watford pay in ruthless fashion when, minutes later, Dani Ceballos won the ball off Will Hughes, and Sead Kolasinac raced upfield with real intent before finding Aubameyang in the area.
There was still much to do, but the striker span away from Jose Holebas brilliantly before firing into the bottom corner. It was absolutely clinical.
We extended our advantage just after the half-hour mark when Mesut Ozil played the pass of the match to split the Watford defence and find Ainsley Maitland-Niles on the right, and he was able to pick out Aubameyang for his second of the afternoon.
If the first half was relatively comfortable, the second half was anything but after the hosts took advantage of a Sokratis error as Tom Cleverley fired in from inside the area.
Suddenly the mood inside Vicarage Road changed as the home fans raised the volume, and we were now facing a very different challenge.
Ismaila Sarr soon dragged a shot wide when well placed, before fellow substitute Roberto Pereyra sent a backheel just wide of the far post as the hosts upped the pressure.
We were up against it, and finally the pressure told when David Luiz tripped Roberto Pereyra just inside the area, and the Argentine slotted home the resulting penalty.
Gerard Deulofeu curled one inches wide of the far post with seven minutes remaining, before Cleverley saw a goalbound shot deflected over as the tension inside the ground rose further.
But there was to be no late twist – and we had to settle for a disappointing draw.
HOW IT HAPPENED
See how the game unfolded with our play-by-play commentary of the game at Vicarage Road.
WHAT IT MEANS
We start our Europa League campaign on Thursday with a trip to Frankfurt.
The German side reached the semi-finals last season, but were beaten by Chelsea on penalties.
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