A very high efficiency steam producing heater and boiler is disclosed wherein an outer vault encases an inner casing with a small exhaust passage there between. The walls of the casing contain a series of capillary tubes through which water flows. A combustion chamber in the lower portion of the casing provides a source of heat for the water which flows from the casing into a series of water drums located near the combustion chamber. From the water tubes, the heated water then passes through a serpentine series of steam tubes and then upward into one or more steam drums. Steam passes through the steam drums out of the casing and vault for commercial or residential usage.