Abstract In general, latent heat recovery is usually accompanied by the corrosion of the heat exchanger, which is caused by the strongly acidic condensate when the temperature of the flue gas is lowered below the acid dew point. The present study has been conducted to investigate the heat and mass transfer characteristics in a titanium heat exchanger with excellent corrosion resistance used for waste heat recovery with the condensation arranged in a gas fired water heater. In addition, the thermal efficiency of the gas fired water heater was evaluated based on the net calorific value at the maximum rated output during latent heat recovery from the exhaust flue gas. Parametric studies were conducted for the flue gas flow rate, inlet temperature and mass flow rate of the supplied water, respectively. Different arrangements of the tubes of the heat exchanger including in-line and staggered configurations were investigated. The experimental results indicate that the thermal efficiency of the gas fired water heater with a latent heat recovery (LHR) heat exchanger was enhanced by about 10% compared with conventional instantaneous water heaters, i.e., water heaters without heat recovery. In addition, in terms of the Nusselt number and the Sherwood number, the heat and mass transfer performance of the staggered tube bank type were approximately 50% and 10% higher than that on the in-line tube bank type when the Reynolds number of the flue gas was 103.