A water heater is a device for heating and storing water. Heat is generated by gas, electric, or steam. In industrial usage, large water heaters are called boilers.

A gas water heater is nearly identical to an electric water heater, except that it does not contain the two heating elements, but instead has a gas burner at the bottom, with the chimney running up through the middle of the tank.

A heavy inner steel tank that holds the hot water

Typically, this tank holds 40 to 60 gallons. It has to be able to hold the pressure of a residential water system, which typically runs at 50 to 100 pounds per square inch (psi). The tank is tested to handle 300 psi. The steel tank normally has a bonded glass liner to keep rust out of the water.

Insulation surrounding the tank

A dip tube to let cold water into the tank

A pipe to let hot water out of the tank

A thermostat to control the temperature of the water inside the tank (Many electric water heaters have a separate thermostat on each element.)

Heating elements to heat the water (These are the thick electric elements similar to those you see inside an electric oven.)

A drain valve that allows you to drain the tank to replace the elements or move the tank

A pressure relief valve (This is an important safety feature that keeps the tank from exploding.)

A sacrificial anode rod to help keep the steel tank from corroding.

The thermostat controls the temperature of the water inside the tank. Normally you can set the temperature between 120 and 180 degrees Fahrenheit (49 to 82 degrees Celsius). It is generally recommended that you keep the temperature between 120 to 140 degrees F (49 to 60 C) -- especially if there are children living in the house -- to prevent scalding. It also saves energy.

Normally, the thermostat is underneath a cover plate and it has a knob or a screw that you can use to set the temperature

A water heater uses nothing more than the "heat rises" principle to separate hot water from cold water in the tank.

As cold water comes in, it remains at the bottom of the tank because it is denser than hot water. If you use the hot water faster than the heating elements can heat the incoming cold water, and if you consume all of the hot water that the tank holds, you run out of hot water in the middle of your shower. If this seems to happen too often, it could mean that the bottom heating element in an electric water heater has burned out or that your water heater is too small for your house. Or it could mean that you are taking really, really long showers.