Sixteen players have featured for both clubs down the years, with one record-breaking former Red still plying his trade with the Hornets.
Ahead of Saturday's meeting on Merseyside, we've picked out 10 of the most notable players to have donned both the red of LFC and yellow of Watford.
John Barnes
Watford: 296 games, 83 goals
Liverpool: 407 games, 108 goals
Spotted playing for Middlesex League club Sudbury Court, John Barnes was signed by Watford manager Graham Taylor for a set of training kit. The tricky winger repaid the faith of the Hornets boss by helping the club win promotion to the English top flight and reach two FA Cup finals.
Liverpool boss Kenny Dalglish paid £900,000 to bring the Jamaica-born England international to Anfield in 1987. His sweet left foot, talent and grace proved the downfall of many a team as he swept up four trophies, including two league titles, and the 1988 PFA Player of the Year award during a decade at Liverpool.
Ronny Rosenthal
Liverpool: 97 games, 22 goals
Watford: 39 games, 11 goals
Signed by Dalglish, Ronny Rosenthal had scored seven goals on loan as Liverpool won their last league title in 1990.
A cult hero among fans, 'Rocket Ronny' scored a perfect hat-trick on his full debut and an injury-time winner in the Merseyside derby against Everton at Anfield in 1993.
He joined Tottenham a year later, and then in 1997 dropped down to Division Two to join Taylor's Watford and won successive promotions to take the Hornets into the Premier League.
Jermaine Pennant
Watford: 23 games, 3 goals
Liverpool: 81 games, 3 goals
Jermaine Pennant had two loan spells at Watford as a youngster after being snapped up by Arsenal in 1999 as a highly-rated 15-year-old winger.
Signed by Rafa Benitez in 2006, his form at Liverpool was inconsistent, though was one of the stand-out performers during the 2007 Champions League Final defeat in Athens.
Pennant was allowed to leave Anfield on a free transfer in 2009.
David James
Watford: 96 games, 0 goals
Liverpool: 277 games, 0 goals
Watford academy graduate David James succeeded Hornets legend Tony Coton between the posts at Vicarage Road. By the time he arrived at Anfield in 1992 he was rated as one of the hottest young 'keepers in the country.
However, despite some brilliant performances and a League Cup win, James never really reached his peak with the Reds. He left in 1999 to join Aston Villa and went on to become one of England's best goalkeepers.
Albert Riera
Liverpool: 56 games, 5 goals
Watford: 8 games, 1 goal
Spanish winger Albert Riera spent two years at Anfield after being signed by Benitez from Espanyol on transfer deadline day in 2008. However, he later fell out with the manager and was subsequently sold to Greek side Olympiacos in July 2010 by new boss Roy Hodgson.
He returned to England four years later to join Watford in the Championship, playing eight games before being sent off against Huddersfield and banned for the final match of the campaign.
Bert Slater
Liverpool: 111 games, 0 goals
Watford: 151 games, 0 goals
A Scottish Cup winner with Falkirk, goalkeeper Bert Slater was signed by Phil Taylor's Liverpool in 1959 but conceded eight goals in his first three matches and was dropped. His fortunes were transformed under new boss Bill Shankly, who played 'Shorty' for 96 consecutive league matches.
He joined Division Three outfit Watford from Dundee in 1965 and was first-choice keeper for a number of seasons before becoming a coach at Vicarage Road.
Jerome Sinclair
Liverpool: 5 games, 1 goal
Watford: 11 games, 1 goal
Jerome Sinclair became the youngest ever player to represent Liverpool when made his debut at the tender age of 16 years and six days as a substitute against West Bromwich Albion in 2012.
A prolific goalscorer at Academy level, the forward earned a maiden first-team start in January 2016 under Jürgen Klopp, scoring in a 2-2 FA Cup draw at Exeter City.
However, in the summer of 2016, the England youth international joined Watford and remains at Vicarage Road, where he has made three Premier League appearances this season.
Fred Pagnam
Liverpool: 39 games, 30 goals
Watford: 157 games, 74 goals
Fred Pagnam was a prolific forward for the Reds and averaged almost a goal a game during his Anfield career.
Signed by Liverpool manager Tom Watson (pictured above), the Lancastrian was top scorer for the club in his debut season - scoring 26 goals during the 1914-15 campaign. But like so many players of his generation, his professional career was cut short by the First World War.
He joined Third Division South side Watford in 1921 for a club record fee and made more than 150 appearances for the Hertfordshire outfit, who he later managed for three seasons.
Paul Jones
Liverpool: 2 games, 0 goals
Watford: 11 games, 0 goals
With Jerzy Dudek and Chris Kirkland both out injured, Welsh goalkeeper Paul Jones was signed on loan from Southampton as emergency cover by Liverpool manager Gerard Houllier in 2004.
He played just two games - against Aston Villa and Tottenham - but became Liverpool's oldest post-war debutant at 36 years, eight months and 23 days old.
Jones made 11 appearances on loan at Watford, from Wolves, during the 2004–2005 season.
John Evans
Watford: Youth
Liverpool: 107 games, 53 goals
A former Watford youth player, striker John Evans joined Liverpool on Christmas Day 1953, made his debut the following day and went on to average a goal every other game over the course of his Anfield career.
He is one of only five Reds to score five goals in a single game - in a 5-3 win over Bristol Rovers during the 1954-55 season - and is one of only 13 players to score 30 plus goals in a season for Liverpool.