A water heater is provided having a sorption based reactor that is integrated into a water tank. The water heater is operated between an adsorption cycle and a desorption cycle. During the endothermic desorption cycle, a primary heat exchanger is used to transfer heat from a condensing primary fluid that was vaporized from the sorbate to water in the tank. A charging heat transfer system supplies heat for the vaporization during endothermic desorption cycle. During the exothermic adsorption cycle, a secondary heat exchanger is used along with a secondary fluid to transfer heat generated by adsorption of the primary fluid to water in the tank. An evaporator provides for vaporization of the primary fluid during the adsorption cycle. Substantial improvements in energy efficiency can be achieved.