Abstract: A high efficiency hybrid atmospheric water heater that employs direct and indirect contact of water and hot gases to achieve approximately 99% efficiency. The heater employs a large capacity combustion chamber to burn both liquid and gaseous fuel and achieving low nitrogen oxides (NOx) emissions. The heater also employs exhaust tubes in combination with a unique receiver can, or alternately, candy cane shaped exhaust tubes, thereby eliminating expensive metal overheating associated with canopy covered exhaust tubes and preventing backpressure and associated sporadic burner performance, noise, and vibration. The heater employs two recirculation water nozzles for introducing water above the direct and indirect contact portions of the heater, depending on the temperature of the water to be recirculated.