Abstract: This invention provides a water heater including a water storage tank, a flue, a jacket around the tank and the flue and having a top end, a top cover which extends over the tank and the flue and which closes the jacket top end, and a flue collector within the top cover and having an exhaust opening within the top cover and in communication with the flue. The water heater further includes a flue damper mechanism comprising a damper disk pivotally mounted within the flue collector exhaust opening so that the disk can pivot between a closed position closing the exhaust opening and an open position opening the exhaust opening, and drive means for pivoting the damper disk. The drive means comprises a damper actuator exterior of the top cover, a mounting tube secured to the flue collector and secured to the damper actuator, and a damper shaft within the mounting tube and extending between the damper actuator and the damper disk.