Abstract: A water heater apparatus is shown which includes a water heating tank having generally cylindrical sidewalls with upper and lower ends, each of which is closed by a transverse wall section to define a closed tank interior. The tank also has a water inlet and a water outlet. A plurality of vertically arranged fire tubes are connected between the upper and lower transverse wall sections, each fire tube having an open interior for conducting products of combustion. A combustion chamber is mounted on the upper end of the water heating tank for providing products of combustion to the open interiors of the fire tubes. A flue collector chamber is located at the bottom end of the tank for collecting and exhausting the products of combustion from the vertically arranged fire tubes. An induction blower draws the products of combustion downwardly from the combustion chamber, through the fire tubes and out the flue collector chamber for exhaustion from the apparatus.