Energy required for water heating accounts for approximately 40 percent of national residential natural gas consumption in California. With water heating contributing such a substantial portion of natural gas consumption, it is important to pay attention to water heater efficiencies. This paper reports on an investigation of a patented, buoyancy-operated flue damper. It is an add-on design to a standard atmospherically vented natural-draft gas-fired storage water heater. The flue damper was expected to reduce off-cycle standby losses, which would lead to improvements in the efficiency of the water heater. The test results showed that the Energy Factor of the baseline water heater was 0.576. The recovery efficiency was 0.768. The standby heat loss coefficient was 10.619 (BTU/hr-oF). After the damper was installed, the test results show an Energy Factor for the baseline water heater of 0.605. The recovery efficiency was 0.786. The standby heat loss coefficient was 9.135 (BTU/hr-oF). The recovery efficiency increased 2.3 percent and the standby heat loss coefficient decreased 14 percent. When the burner was on, the baseline water heater caused 28.0 CFM of air to flow from the room. During standby, the flow was 12.4 CFM. The addition of the damper reduced the flow when the burner was on to 23.5 CFM. During standby, flow with the damper was reduced to 11.1 CFM. The flue damper reduced off-cycle standby losses, and improved the efficiency of the water heater. The flue damper also improved the recovery efficiency of the water heater by restricting on-cycle air flows through the flue.With or without the flue damper, off-cycle air flow upthe stack is nearly half the air flow rate as when the burner is firing.