Sevastova, 27, is ranked 19 in the world – some 83 places above the Guernsey girl.
But Watson tore up the copybook by blitzing through in one of her best displays ever in 1hr 1min.
Watson nearly shocked Serena Williams in 2015 only to come up short in a Centre Court epic.
And on this form she has it in her to challenge the best again with a clean display of power hitting.
Watson bagelled Sevastova to win the opening set in just 18 deadly minutes.
The Latvian upped her game in the second but Watson came from a break down twice before wrapping up the clash when Sevastova dumped a backhand into the net.
Watson plays Elena Vesnina or Victoria Azarenka in round three – not that she knew it.
“I’ve no idea who I’ve got next! I haven’t looked at the draw,” Watson said, seconds after leaving court.
On this showing, she could fear no-one.
