A water heater system having a running water inlet through which running water flows in and a hot water outlet through which hot water heated in a heat exchanger is discharged is disclosed. The water heater system may include a first connection pipe connecting a gap between the running water inlet and an entry of the heat exchanger, a second connection pipe connecting a gap between an outlet of the heat exchanger and the hot water outlet; a bypass pipe connecting a gap between the first connection pipe and the second connection pipe, a bypass valve installed to the bypass pipe so as to control the direction of water flowing through the bypass pipe, and a controller, in a hot water usage mode, controlling the bypass valve so that the water moves from the first connection pipe to the second connection pipe through the bypass pipe, and in an inner circulation mode, controlling the bypass valve so that the water moves from the second connection pipe to the first connection pipe through the bypass pipe.