A water lantern for floating on water with an LED candle is provided. The water lantern includes a base, dowel rods and a curtain. The base is designed with a tiered structure extending to a top surface with apertures formed therein to receive the dowel rods and a central recess for receiving the LED candle. The curtain is removably positioned over the base with the dowel rods maintaining the curtain in an expanded open position. The tiered structure of the base enhances the floating stability of the water lantern while also holding the LED candle above the water level to protect the LED candle from splashing water.