Domestic water heater container is one of the applications that ask for high manufacturability, high strength, heat retention, corrosion resistance, hygienic operations, longer life, better ergonomics and optimum economy. Stainless steel is finding a place in this application, replacing conventional copper and enamel coated carbon steel containers. Using stainless steel for chemical handling equipment or heat transfer application is not a new concept. However using it for manufacturing container of domestic water heater is itself a state of art. With a proper understanding of behavior of stainless steel it becomes a success story. Performance of stainless steel as inner container of water heater depends on chemical composition, variation in microstructure, surface conditions, residual stresses, welding parameters, welding method and pre- and post-welding treatments. The paper discusses about the requirement of the material and suitability of the stainless steel for this particular application.