A leaking hot water heater requires immediate attention to prevent water damage. Identify the leak source checking the pressure relief valve drain valve pipe connections and the tank itself. Valve leaks are repairable but a leaking tank means replacement is needed. Turn off the power and water supply. Place towels and a bucket to contain water. A leaking tank indicates internal corrosion and cannot be patched. Most leaking water heaters are beyond their expected lifespan.