If water pools around the base of your water heater or you hear the sound of water sizzling on the hot burner, it doesn't necessarily mean that the tank or plumbing is leaking. In many cases, condensation forms when cold water fills the tank, then drips down.
If the problem appears when the tank is first filled or during chilly seasons when incoming water is particularly cold --but then disappears when the water has had a chance to warm up-- it usually indicates condensation. Another possibility is that the water may be coming from the temperature-pressure (TP) relief valve, a condition that demands the immediate attention of a plumber or appliance repair person.
1) Look for signs of a leak along pipes, at valves, and around the tank area. If you discover a leak, repair the problem yourself or call a plumber. If the tank itself has a leak, have your water heater replaced. A water leak may be cured simply by tightening the drain valve or by closing a temperature-pressure relief valve that's open. But if the leak is serious, be aware that water heaters have limited life spans, and it's possible that your tank has become corroded. If that's the case, the water heater must be replaced.
2) Look for drips at the temperature-pressure (TP) relief valve; this releases water if it senses excess pressure, either because the temperature is set too high or because your water supply system is equipped with special valves that reduce water pressure and don't allow for hot-water expansion in the tank. If this appears to be the case with your water heater, follow your owner's manual for the proper procedure.
3) If there is no water dripping from the TP valve, minimize using hot water for a couple of hours and check the water heater again. If the leaking has stopped, the problem is probably condensation. Check for obstructions in the vent (gas water heaters only). If you find any, shut off the water heater and clean out the flue. If the problem persists, call a plumber.