Abstract: An apparatus for heating a confined liquid medium having a closed vessel with a heat transfer liquid therein, a burner housing within the vessel submerged in the heat transfer liquid, a burner having a fuel inlet and combustion air inlet, the burner having a flame outlet communicating with the interior of the burner housing, a flue conduit connected to the burner housing at a point spaced from the burner flame outlet and extending through the vessel wall and communicating with the atmosphere, a liquid medium heat exchanger supported within the vessel above the burner housing including an inlet and outlet conduit passing through the wall of the vessel and a transfer liquid heat exchanger within the burner housing intermediate the burner flame outlet and the flue conduit including means for passing the heat transfer liquid therethrough.