Abstract: A water heating and forced air heating system that provides potable hot water and that also provides heated air for heating enclosed spaces within buildings, including: a water heater including a water tank filled with water, a burner for heating the water in the tank, and an exhaust flue for removing hot gases generated by the burner; a gas-to-liquid heat exchange unit disposed within the flue; a forced air heater having a casing that defines a chamber, a liquid-to-gas heat exchange unit disposed within the chamber, a gas-to-gas heat exchange unit also disposed within the chamber, and a blower for pulling fresh air into the chamber and blowing it past the heat exchange units to absorb heat; a pump for pumping water through the gas-to-liquid heat exchange unit so that the water becomes heated by the hot gases within the flue; another pump for pumping heated water through the liquid-to-gas heat exchange unit to heat the air flowing within the chamber; and a conduit for connecting the terminal end of the flue t