The invention provides a control method of a water heater system, which comprises the steps of: detecting the water level and the water temperature in a water tank, and operating a corresponding heating mode according to a detecting result. The invention further provides a water heater utilizing the system control method, and the water heater avoids the hot water supply interruption phenomenon caused by stopping of the system due to the conditions of transient water shortage or emergent failure of a water flow switch, and the like, so that the stability, reliability and market competitiveness of the water heater are improved.