An endothermic heat pump water heater has a water tank supported atop a hollow base, a heat pump circuit operable to provide primary heat to water in the tank, and an electric resistance heating element operable to provide secondary heat to the water. The heat pump circuit includes refrigerant tubing in which a compressor disposed within the base, a condenser in heat exchange external contact with the tank, a refrigerant expansion device, and an evaporator disposed within the base are connected in series. A vertical duct, external to the tank, has an inlet adjacent the upper tank end, and a fan is operative to sequentially flow air inwardly through the inlet, downwardly through the duct into the base, across the compressor, across the evaporator, and then outwardly from the base.