The Brazil Under-20 international had been linked with both Manchester United and Chelsea but arrives at Vicarage Road for a reported £11.2million fee.
Watford enhanced to 2/1 to be relegated
Richarlison is the latest in a string of new recruits, with Will Hughes, Nathaniel Chalobah and Tom Cleverley having already signed up under new Watford boss Marco Silva.
The 20-year-old scored 19 goals in 67 appearances for his former club.
Watford begin their Premier League campaign at home to Liverpool on Saturday.
