In water tanks and pipes, amoebas, bacteria, and fungi thrive. If left untreated, the water smell will worsen over time. These dangerous bacteria, according to the CDC, can also cause illness. Some are responsible for lung and skin infections. Temperature affects the growth of these bacteria. To kill, raise the temperature to 130-140 degrees Fahrenheit. Cleaning the tank with bleach can also be beneficial. The replaceable anode rod is another potential source of the odor.