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How to test water heater thermostats
Gas and Electric

How to replace TP valve
Leaking water heater
Large volume hot water released sporadically from TP valve
Malfunctioning thermostat is only cause
Applies to gas and electric water heaters

1) How to Replace electric water heater thermostats
How to replace electric water heater thermostats

2) How to Replace gas control valve thermostat
How to replace gas control thermostat
How to replace water heater gas control valve thermostat
Troubleshoot by type of gas control valve

Test Gas water heater thermostats
Troubleshoot by type of Gas water heater thermostats
Remove gas valve
How to replace gas control
Gas water heater thermostat
Troubleshoot by type of Gas water heater thermostats
Gas control valve thermostat Thermostat located inside copper tube
ECO energy cut off will trip if water inside tank exceeds 170 F.
ECO is usually single-use and gas control must be replaced
How to test ECO White-Rodgers and Robert Shaw
Intellivent gas control ECO can be resetIf water temperatures fluctuate at tap, then Gas control can be bad -or- there is plumbing problem
Gas control valve thermostatCheck temperature at tank drain valve and TP valve and compare with temperature at tap
Adjust temperature at tank
Crossover: single handle faucet has bad cartridge and other causes
Stacking: serveal short water draws cause very hot water 
How to replace gas control
How to replace gas control

Test Electric water heater thermostats
Testing does not reveal sticking and calibration issues!!!
For the tradesman, and person wanting a sure-fix, it's better to repace thermostats How to replace water heater thermostats

Never touch WET water heater until power is OFF  Leaking water heater
Avoid electrocution/
Multimeter
Tape multimeter leads to wood
Stand on dry boards
Do not touch metal
Wear dry clothes
Do not touch wet water heater
Wear insulated gloves
Do not hold metal object in mouth
Do not lean into anything made of metal
Electricity is ON during tests below

Testing thermostats as shown below will not reveal sticking and calibration problems.
It is easier to replace both thermostats.
Resources
How to replace water heater thermostats
How to test elements

Buy:
Multimeters at Amazon
Buy non-contact voltage tester at Amazon
Electric testers at Amazon
EZ repair If you are NOT comfortable working with live electricity, then turn off power and use EZ repair

EZ electric water heater repair will fix 95% of problems: Turn power OFF
Check for leaks. Inspect for loose wires and burning. Push reset button located upper thermostat. Check circuit breaker. Test both elements. Replace both thermostats. Clean sediment out of tank  Replace anode rod
More information and causes: How to troubleshoot electric water heater
Skilled repair brief If you are safe working with electricity, then use skilled water heater repair
Power is ON. Absolute electrocution danger. Call plumber or electrician.
Read brief pdf
Test electric thermostats: Step by step with illustrations
Tests below show if water heater thermostats are working.
However thermostat can pass tests below and still be out-of-calibration and not reading correct temperature
And sticking thermostat can become temporarily un-stuck during test, and appear to function correctly.
It is easier to replace both thermostats and start fresh
How to replace water heater thermostats

Step 1: Start with cool or cold tank
Turn water heater off for a while
Let overheated tank cool
Run hot water tap, so cold water fills bottom of tank

Larger image
STEP 2: Power is OFF/ Inspect water heater parts
Open covers on water heater: remove insulation and plastic protectors.
Before testing: Turn power off and inspect parts.
Inspect for wetness and rusting. Leaking water heater
Inspect for burned and melted wires. replace part with melted wire and Test wire
Check if thermostats sit flat against tank wall
Check that all screws are tight against copper wire
Resources
How to replace thermostat
How to test element
How to replace element
Troubleshoot electric water heater
Resources
How thermostats work
Off peak thermostats and timers
How to wire thermostats
Test electricity STEP 3: Turn power ON/ Test for 240Volt:
1) Test across top two screws on upper thermostat: Should read 240Volts.
Test each top screw to bare metal part of tank. Test should read 120 volts.

2) If test on top two screws of thermostat does not show correct voltage: Test connections at top of tank: Test across red and black wires: should read 240Volts.
Test Black to bare ground: should read 120Volts
Test Red to bare ground: should read 120Volts See basic water heater circuit
Reinstall wire connectors, and put cover back over wires. All connections need to be covered: Wire connector basics
- If tank is not receiving 240 volts: Test electricity to water heater

Action #2: Test for 240Volt at top of tank
STEP 4: Push ECO firmly

Make sure ECO is engaged.
If ECO is out and will not reset, then Upper thermostat is bad. Replace upper thermostat
ECO is heat sensitive, and trips when sensing temperatures above 150-180 degrees. This can be caused by cracked element. Test elements
Or trips when thermostat is bad.
Or trips when loose wire causes overheating at thermostat. Check for loose wires. Replace any burned and melted parts.
Or trips when wire gauge is too small for element wattage, causing heat that trips ECO. This happens when replacement element has greater wattage than shows on label on side of tank. Compare rating label with wattage rating printed on end of each element.
Or trips when wire has partially melted, and wire can no longer carry element wattage, causing heat that trips ECO. This happens if water heater leak caused short. Or if circuit breaker tripped. Or if water heater had a fire. Replace wires.
Larger image
Step 5: Test if ECO is functioning
Upper thermostats
1) Test L1 to L4 = reads 240Volts. If no volts, and ECO is not tripped, then  upper thermostat is bad.

2) Test L3 to T2, will read 240Volts (if water inside tank is cold, and power was just turned ON)
Test L3 to T4, will read 0 Volts

One must be 240V and the other 0V
If L3-T2 test and L3-T4 test both read 0 Volts, or if both read 240 Volts, then upper thermostat is bad.
water heater circuit breaker STEP 6: If water heater is NOT receiving 240Volts, then test water heater breaker and circuit.
Test 240volt circuit to water heater from circuit breaker
Review:
Water inside tank is cool or cold.
Water heater has 240Volts present at upper thermostat
Water heater is regular-ordinary residential water heater that is wired for non-simultaneous operation.
Read label on side of tank and look for words: Non-simultaneous   How electric water heaters work   How to wire thermostats
Both Elements are receiving 120Volt power to blue and/or red wire.
Parts are dry, wqater heater has no water leaks, there are no melted wires or parts and no burn smell is present
Thermostats and elements were covered with insulation when tank-covers were removed. Covers and insulation must be put back when finished.
Upper element Step 7: Upper element: Test if blue wire has power
This test is for typical non-simultaneous residential water heater
Blue wire on upper element should have live power at all times
Set multimeter to read volts AC.
Test between blue wire and bare metal part of water heater
Should read 120Volt at all times. 
When element turns ON, then test across both screws for 240Volts.

If blue wire shows no voltage, then wire is bad or upper thermostat is bad. 
Action: Test wire  Replace upper thermostat
 
Larger image of typical 240Volt non-simultaneous residental water heater

If your wiring is different: Wire thermostats
water heater element Step 8: Lower element: Test if red wire has power
(Some water heaters have blue and yellow at lower element)
Red wire on lower element should have live power at all times.
Set multimeter to read volts AC.
 Test between red wire and bare metal part of water heater
Should read 120Volt at all times. 
When element turns ON, then test across both screws for 240Volts.

If red wire shows no voltage, then wire is bad or upper thermostat is bad. 
Action: Test wire  Replace upper thermostat
Test upper thermostat
Turn upper themostat UP to max
Change thermostat settings

Step 9: Set upper thermostat to maximum temperature

Water in tank is cool.
Set upper thermostat to maximum

This will cause upper element to turn ON
Listen if upper element is heating water.
If temperature inside tank exceeds 150 degrees, or if thermostat is bad or thermostat is out of calibration, then element will not turn ON.
If element is bad, then element will not turn ON.
Resources
How to test element

Upper thermostat temperature setting
How to adjust water heater temperature
Upper element
Upper element
Step 10: Test for 240V at upper element
Set multimeter to read volts AC
1) Test across both element screws for 240Volts.
2) If upper element tests for 240Volts then upper thermostat is good so far.

If element tests for 240Volts across both screws, then that does NOT mean element is good.
Element can still be bad. Action:  How to test element  How to replace element and clean tank
Lower thermostat
Lower thermostat
Step 11: Top screw on lower themostat should have NO power when upper element is ON
Lower thermostat has 2 screws: When the upper element is ON, then lower thermost should receive no power on the top screw of lower thermostat. Step 15 below re-tests same screw when upper element is OFF.

Set multimeter to read volts AC
1) Test top screw on lower thermostat to bare metal part of water heater
2) If test shows no power, then upper thermostat is good so far.

3) If test shows power on top screw at same time upper element is ON, then tank is not wired for non-simultaneous operation, or upper themostat is bad. Check label on side of tank for words: non-simultaneous
Action  How to wire thermostats  Replace upper thermostat

Test upper thermostat
Turn upper thermostat to minimum

Change thermostat settings again

Step 12:
Turn upper thermostat to lowest temperature

Set upper temperature to lowest setting. And set lower thermostat to max setting.
When set screw is rotated back and forth, you can hear thermostat click on-off.
If thermostat does not click on-off, then water in tank may be cooler than lowest setting, or upper thermostat is bad.
Action Replace upper thermostat

Power should now be available at lower themostat.

Upper thermostat temperature setting
Test upper thermostat
Turn lower themostat to maximum
Step 14: Turn lower thermostat to highest temperature

When set screw is rotated back and forth, you can hear thermostat click on-off.
This is the internal bi-metal switch. Two different metals fused together expand at different rates when heated. That causes metal to move switch back and forth as temperatures heat and cool.
If thermostat does not click on-off, then water in tank may be cooler than lowest setting or lower thermostat is bad.
Action  Replace lower thermostat
Lower thermostat
Lower thermostat temperature setting
Lower thermostat
Lower thermostat
Step 15: Test lower thermostat

Lower themostat set to maximum temperature
Cold water in bottom of tank. Upper part of tank must be heated above 90 degrees or lowest set point of upper thermostat.
Upper thermostat set to miminum temperature.

At this point, Lower themostat should be ON. Lower element should be ON.

Test each screw on lower thermostat to bare metal part of tank.
Each screw should test for 120Volts.

If top screw on lower thermostat has no power, then upper themostat is bad or black wire between upper and lower themostats is bad. Action: Test wire
If top screw has power, but bottom screw has no power, then lower themostat is bad.
Action: Replace lower thermostat
lower element
Lower element
Step 16: Test for 240V at lower element
Set multimeter to read volts AC
1) Test across both screws on lower element for 240Volts.
2) If element is supposed to be ON, but does not test for 240V, then lower thermostat is bad, or wire between lower themostat and element is bad. Action: Test wire  Replace lower thermostat

If element tests for 240Volts across both screws, then that does NOT mean element is good.
Element can still be bad. Action:  How to test element  How to replace element and clean tank
Written steps
Interior diagram water heater top thermostat
See larger
Start with cold or cool water in tank. Overheated tank must be cool <> run hot tap so cold water enters tank.
Electricity is ON. Power is ON means risk of electrocution which can be sudden, or can take a moment or two, and will include anyone who grabs a hold of you. Have your spouse knock you loose from wires using a 2x4, and then treat possible stopped heart and 3rd degree burns. If you are not familiar with electricity, or spouse does not want to hit you with a board, then use EZ repair shown above, or call plumber, or electrician. If you want to understand how to test thermostats, then keep reading information below.
Set multimeter to read 240 Volts AC
.
1) Upper thermostat: Test across L1 to L3 should read 240Volts unless water heater not receiving 240V. How to test water heater circuit
2) Test L1 to L4 should always read 240Volts unless ECO is tripped, or thermostat is bad, or water heater not receiving 240Volts.
3) Next step: change thermostat temperature settings using screwdriver See image: Set upper thermostat to maximum temperature setting. Set lower thermostat to minimum temperature setting. Cool water in tank means upper element will be on How a water heater works
4) Test L3 to T2 should read 240V. This means upper thermostat is sending power to upper element. Then test across both screws on upper element. If element does not show 240V, and you know element is good, then one of the wires between thermostat and element is shorted and needs to be replaced.  How to test if element is good
5) While upper element is on, check for electricity going to lower thermostat and element. Test L3 to T4 should read 0-Volts. If  L3 to T2 and L3 to T4 both read 240V at same time, then upper thermostat needs to be replaced. How to replace thermostats
6) Reverse thermostat temperature settings: Set upper thermostat to minimum temperature setting. Set lower thermostat to maximum temperature setting. Assuming water in upper part of tank is above 90 degrees: Now L3 to T2 should be 0V and L3 to T4 should read 240V. This means electricity is being sent to lower thermostat and element. 
7) Test shows that electricity is being sent to lower element. Cold water is in tank, and lower themostat is at maximum setting, so lower element should be ON. Test across both lower element screws. Test should read 240V. If there is no voltage, then wire from top is shorted and needs to be replaced, or lower thermostat is bad. How to test wire for continuity
8) Test if lower element is receiving electricity from top: Test each screw to bare metal part of water heater should read 120Volts. If both thermostat screws test for power to ground, and testing across lower element screws still does not show 240V,  then wire from top of tank is bad and need replacement. If lower element never turns off, then replace lower thermostat.
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