Flammable vapor resistant water heater with low NOx emissions

A water heater including a water container; a combustion chamber adjacent the container, the combustion chamber having at least one air inlet to admit air and extraneous fumes into the combustion chamber and confine ignition and combustion of the extraneous fumes within the combustion chamber; a burner associated with the combustion chamber and arranged to combust fuel to heat water in the container; and an air diverter positioned between the air inlet and the burner and adapted to channel at least a portion of combustion air passing through at least a portion of the air inlet to a position for mixture with the fuel prior to entering the burner to slow combustion and thereby reduce combustion temperatures and NOx emissions.