Abstract: A water heater bag and the method of using the bag to dispose of the water heater are disclosed herein. The bag is comprised of a rectangular bottom, the rectangular bottom adapted to identify for the user the position or the bag for the most proper and easiest installation. One or more sidewalls are integrated to the bottom, extending away from the bottom at a generally perpendicular angle at full bag extension. Each top portion of the one or more sidewalls is adapted to extend beyond the top end of an inserted water heater, so the bags length is greater than the length of the water heaters it carries, or 90 inches. These top portions have an upper end opening adapted to receive the water heater and are adapted to fold and be punctured by at least one water port. The material used in constructing the bag is comprised of a disposable material having a thickness of about 2 mils.