Abstract: An improved gas-fired water heater is disclosed which comprises a sealed cylindrical shell extending from the base of the water tank to the top, enclosing the burners and controls so as to shield them from flammable vapors in the immediate vicinity. The cylindrical shell forms an annular passage outside the tank (and insulation, if present), which facilitates the intake of combustion air. This annular passage is shielded from above and the side adjacent the top of the tank by a cover fitted to the tank top which extends downward from the top to form a lip which laterally shields the annular passage and directs intake combustion air upward from outside the shell to enter the annular passage. The bottom of the heater can be extended by a cylindrical skirt extension which encloses the burner of the heater in an airtight manner except for air inlets in the bottom of the extension.