There is usually no reason to panic when your water heater starts leaking. It is a common problem faced by households and can be fixed without the help of a licensed plumber most of the time. When you find that your water heater is leaking, the first thing you should do is identify the source and cause of the leakage. It may be a worn out valve, faulty connection or corroded tank. Once you have determined what is causing the problem, fixing the water heater is a matter of changing the setting or repairing or replacing the faulty components. You may need a screw driver and an adjustable wrench for this job.