Margo had her last major hits in 1981, dueting with Rex Allen Jr., on the top 20 hit "Cup of Tea", along with a Top 30 hit called "While the Feeling's Good." Their duet "Cup of Tea" was nominated for "Top Duet of the Year" by the Academy of Country Music in 1981. By 1982, her chart success had faded. She continued to release non-album singles which reached progressively low positions on the charts. Her last hit on the national charts came in 1988 with "Echo Me" from her album "The Best Yet", from Playback Records. Margo and her daughter, Holly Watson, became a Christian music group, called Margo Smith and Holly, and they recorded for Homeland Records. She and her daughter were popular Christian singers throughout much of the 1980s and enjoyed several Christian Country hits, among them "This Time" and "God's Kept me All These Years." Holly became a television spokeswoman and actress.