Richard Chaplow netted a dramatic winner in the fifth minute of injury time as Town won 1-0 at Watford, who had started the day leading the Championship, to climb back into the play-off places.
Boss Mick McCarthy made three changes from the team which beat Bolton 1-0 on Tuesday with Kevin Bru replacing Teddy Bishop, who has sore shins, in midfield.
Luke Varney and Chris Wood came into a three-man attack alongside Daryl Murphy, while Jonny Parr, who was a doubt having taken a kick on Tuesday, missed out and Sears dropped to the bench.
Michael Crowe, 19, was the sub keeper with Dean Gerken not risked having been knocked unconscious at Middlesbrough last week and Paddy Kenny ill.
Watford made three changes from the team which beat Wigan 2-0 in midweek. Miguel Layun, Daniel Tozser and Odion Ighalo replaced Gianni Munari, Matej Vydra and Gabriele Angella.
Neither keeper was particularly troubled in the early stages. Bartosz Bialkowski spent more time dealing with inflatables blown onto the pitch from the 2,200-strong Town following behind his goal than Watford attacks.
Town, who had started brightly, had the ball in the net in the 10th minute when Murphy fed Varney but the on-loan Blackburn man was offside.
On 12 Adlene Guedioura skipped away from Bru midway inside the Town half before unleashing a powerful shot which flew just over Bialkowski’s goal.
Three minutes later, Tyrone Mings surrendered possession inside his own half, allowing Watford to break towards the Town area. Mings was fortunate to see Ighalo’s shot strike Tommy Smith before the left-back cleared the danger himself.
For Town, Murphy saw a promising effort from the edge of the area blocked, then for the Hornets Troy Deeney headed wide from a cross from the right.
On 28 Murphy picked up his first booking of the season for a late tackle on Guedioura, although the Algerian seemed to make a lot of not very much.
Two minutes later, Joel Ekstrand, the Watford player whose wild lunge forced Jonny Williams off with a groin injury from which he is still to return at Portman Road in November, twisted awkwardly and appeared to injure his knee.
The Swedish defender was treated on the pitch before eventually leaving on a stretcher with Gabriele Angella replacing him. Angella’s first contribution was to catch Wood with an arm and pick up the game’s second yellow card.
Varney, playing on the right of what was now a 4-4-2 formation, forced Heurelho Gomes into his first serious of the afternoon on 41, bringing the ball in from the flank and hitting a powerful shot from the edge of the box that the keeper pushed past his post.
A minute later, Guedioura broke through on goal from the Watford midfield and seemed certain to score until skipper Luke Chambers slid in to block superbly.
But it was the Blues ending the half the stronger, a Bru cross from the right following a corner taking the Hornets several attempts to clear, then the Mauritian international screwed an effort from distance well wide.
Neither side threatened again before referee Andy D’Urso blew his whistle to signal half-time.
Town manager McCarthy will have been delighted by the half-time scoreline and his team’s performance.
After an evenly balanced opening, the home side started to string a few passes together but never particularly threatened Bialkowski’s goal until the Guedioura chance that Chambers blocked.
But by that stage the Blues were starting to get on top, forcing set pieces and with Varney in particular looking a danger on the right.
Eight minutes after the break Tyrone Mings picked up his 10th booking of the season for pulling back Marco Motta. The Blues left-back will now be suspended for the next two games.
Five minutes later, Watford swapped Daniel Tozser for Ikechi Anya, then on the hour Paul Anderson replaced Varney on the right of the Blues’ midfield, the loanee receiving warm applause from the Town support after his most effective performance since joining the club.
Chances had been few and far between in the opening 20 minutes of the second half but on 67 the ball fell to Guedioura on the right of the area after Watford had worked their way back into the area following a corner but the midfielder shanked his volley wide.
The home side were on top, however, with Town spending most of their time defending in their own half. But when the Blues broke forward Murphy and Wood appeared to be developing something of an understanding.
Sears replaced Wood, who like Varney had had the best game of his loan spell, in the 74th minute with the Blues now putting the Hornets under pressure for the first time since the break.
Two minutes after coming on Sears forced Gomes to save down to his right with a 25-yard strike which looked set for the corner of the net. From the resultant flag-kick, Chambers nodded Jay Tabb’s cross over.
Watford went very close to going in front in the 79th minute when Deeney out-muscled Chambers down the Hornets left and sent over a cross which Ighalo diverted over the bar from the edge of the six-yard box.
The home side were again beginning to put the Blues under a bit of pressure, Deeney screwing a shot well wide from the edge of the distance. However, the game quickly moved to the other end of the field and Murphy laid the ball off to Tabb, who shot well over from 25 yards.
As the game moved into its final scheduled three minutes Chaplow took over from a clearly exhausted Bru.
Deep into injury time Tabb was booked for a foul on Motta with the game looking certain to end in a goalless.
But suddenly Sears out-fought Ben Watson on halfway as they chased Tabb’s ball forward and brought the ball forward before cutting the ball across to fellow sub Chaplow, who slipped past Gomes and into the net for his first Town goal right in front of the Blues’ support.
The Town subs and staff rushed along the touchline to join in the celebrations as the grounded Chaplow was smothered by his team-mates.
There was no further danger for the Blues before referee D’Urso blew the final whistle to a huge roar from the 2,200 travelling Town army.
The late, late goal capped what had been a superb defensive display from the Blues with the backline and holding midfielder Cole Skuse outstanding.
Although the Blues survived Ighalo’s miss towards the end, Watford were prevented having a single shot on target in the entire 90 minutes.
The result moves Town - who have now done the double over the Hornets, so long their bogie side - back to sixth ahead of Brentford and Wolves and now just five points off the Hornets in second with seven games to play following the international break.
Watford: Gomes, Motta, Cathcart, Ekstrand (Angella 34), Hoban, Tozser (Anya 58), Watson, Layun (Vydra 78), Guedioura, Ighalo, Deeney. Unused: Bond, Munari, Paredes, Pudil.
Town: Bialkowski, Chambers (c), Mings, Smith, Berra, Skuse, Bru (Chaplow 87), Tabb, Murphy, Wood (Sears 74), Varney (Anderson 60). Unused: Crowe, Clarke, S Hunt, Benyu. Referee: Andy D’Urso (Billericay). Attendance: 19,038 (Town: 2,177).