The striker turned down a new contract at Burnley to sign a five-year-deal at Vicarage Road.
Gray, who scored 33 goals in 78 appearances for The Clarets, follows the £11.2m arrival of Brazilian forward Richalarson.
But rather than herald the end for Troy Deeney, boss Marco Silva wants Gray to partner his captain in attack.
Meanwhile, Will Hughes plans to make an instant impact with Watford - by playing his part in downing the club he supports.
The Hornets new boy is a self-confessed Liverpool fan who is no stranger to cheering on the Merseysiders at Anfield.
But there will be no split loyalties when the £8m summer signing from Derby faces Jurgen Klopp’s men in Saturday’s opening game.
Midfielder Hughes said: “Growing up I was a Liverpool fan.
“I loved Michael Owen back in the day and then ever since that I’ve followed them.
“I went to quite a lot of games when I was younger with whatever tickets I could get.
“Quite a few were on the Kop and quite a few on the Anfield Road end as well. So it’s massively exciting to be starting off against them.
“It doesn’t get much get much better than that.
“They’ve spent a lot of money and there’s a lot of pressure on them this year so hopefully we can catch them cold.”
