Abstract: A tankless electric water heater includes a housing provided with a plurality of separate serially connected heating chambers defining a water flow path from a cold water inlet port to a heated water outlet port. Each chamber is provided with a separate electric immersion heating element and a separate temperature sensor for producing a signal indicative of the water temperature in that chamber. The heating element of each chamber is independently controlled by a control system responsive to signals from each of the temperature sensors and the signal produced by an water outlet temperature selector so that the heating element in a chamber is energized only if the sensed water temperature in that chamber is less than the desired outlet water temperature. The number of heating elements energized is proportional to the flow rate, necessary water temperature and heating capability of the heating elements, thus eliminating the problem of overheating at low flow rates.