Greg Pearson's penalty made it a close-call for Tony Carr's team, but David Cowley's strike was merely a consolation as Kevin Keen's side suffered a heavy defeat.
After 14 goals in their first four games, the under-17s were on the receiving end this time, as Birmingham raced into a 2-0 lead after only 10 minutes, and then added another two after the break to put the game beyond Hammers' reach.
With 10 minutes remaining, substitute Cowley curled in an excellent goal to pull one back, but it was purely a consolation and Blues broke away in the final minute to add a fifth.
Said Kevin Keen afterwards: "It was a poor performance and we really lost the game in the first 10 minutes. We started very badly and a couple of defensive mistakes meant that we were playing catch-up very early on.
"As we pushed men forward to try to take something from the game, they exploited the gaps left at the back and added a couple more on the break.
"To be fair, they were a very good side and full deserved the win, but we didn't do ourselves justice today and the players know they are capable of better."
Team: Behcet, Young (Reid 35), White, Norval, Andrews, Cumberworth (Davidson 70), Brady, Singh (Cowley 65), Yao, Allen, Stokes. Subs unused: Welsh, Kemal.
Meanwhile, the under-19s are still looking for their first win of the season, as Watford made it three successive 2-1 defeats for Tony Carr's team at Little Heath.
In an evenly-matched first half, Hammers were left cursing their luck as two defensive errors sent the visitors into a 2-0 lead at half-time.
The hosts rallied in the second half and got back into the game in the 70th minute when Sam Wright was blatantly tripped in the penalty area and Pearson stepped up to convert from the spot.
Hammers then pushed forward in search of an equaliser in the final 20 minutes, but Watford defended in numbers and frustrated their opponents, who couldn't manage to find the all-important breakthrough.
Said Tony Carr: "We really gave ourselves a mountain to climb by making two defensive mistakes in the first half - and at this level they were poor goals to concede.
"We changed things around a bit in the second half and looked a lot more solid. After getting a goal back midway through the second half I thought we could get something out of the game, but they defended very well and we just lacked that extra bit of quality to open them up again.
"I couldn't fault the effort and application of the lads, though, and as long as they keep working hard and showing the right attitude, I'm sure the first win won't be far away."
Team: Reed, McClenahan, Tattum, Henry (Lumsden 44), Laws, Blewitt, Wright (Collington 85), M Noble, Pearson, Carrick, Bunce (Ephrain 70). Subs unused: Tucker, Lee.