Before anything else
If you can smell gas, stop reading and leave the house. Do not flip switches, do not relight anything. Call the gas utility from outside. A relight attempt is not worth any amount of inconvenience.
If there is no gas smell, the rest of this is safe to work through. Everything below is either looking at something or cleaning something — none of it involves opening the gas train.
How the pilot system works, briefly
Understanding this makes the diagnosis obvious rather than a guessing game.
The pilot is a small standing flame. Sitting in that flame is a thermocouple — a metal probe that generates a tiny electrical current when it is hot. That current holds a safety valve open. When the pilot goes out, the probe cools, the current stops, and the valve shuts the gas off.
That is the whole safety principle, and it explains the most common symptom exactly: the pilot lights while you hold the knob down, then dies the instant you let go. Holding the knob is manually overriding the safety valve. If the flame dies on release, the thermocouple is not producing enough current to hold that valve open on its own.
Lights, then dies when you release the knob
This is the thermocouple, and it is the single most common cause. Either it has failed, it is dirty, or it is not sitting properly in the flame.
Give it a full 30 seconds of holding the knob before deciding — the probe needs time to come up to temperature, and people often release at ten seconds and conclude the part is dead when it simply was not hot yet.
If 30 seconds does not do it, look at where the probe sits. The tip should be engulfed in the flame, not near it. A probe that has been knocked out of position during a previous service will never get hot enough. Soot on the tip does the same thing by insulating it — that can be cleaned gently with fine emery cloth.
A thermocouple is an inexpensive part with a finite life. On a heater over about eight years old, a failing one is the expected outcome rather than a surprise.
Will not light at all, or lights weak and yellow
If there is no flame at all, or the flame is small, lazy and yellow rather than a crisp blue, the problem is on the supply side of the pilot rather than the safety side.
The pilot tube is a very narrow orifice and it blocks with dust, spider webbing and combustion debris. This is a genuinely common cause in this area and it is often mistaken for a dead heater.
The air intake screen around the base of the tank is the one most people never think of. Modern heaters draw combustion air through a screened opening at the bottom, and in a garage that screen loads up with lint, dust and pet hair until the burner cannot get enough air. A pilot starved of air burns yellow, sooty and unstable. Vacuuming that screen is often the entire repair.
Check the gas supply too, and check it the easy way: does another gas appliance in the house still work? If the range lights, you have gas.
Worth knowing
A yellow, lazy pilot flame is worth taking seriously even if it stays lit. Blue means complete combustion; yellow means it is not getting enough air, and incomplete combustion is how carbon monoxide is produced. If the flame is yellow, get it looked at rather than living with it.
Lights, runs for a while, then goes out repeatedly
A pilot that holds for hours or days and then drops out is a different fault from one that dies on release.
A draft is the simplest explanation — a heater near a door, a vent or a laundry appliance can simply have its pilot blown out. If it fails on windy days or when a particular door is used, that is the answer.
Otherwise this pattern points at a thermocouple that is marginal rather than dead, producing just enough current when everything is ideal and dropping below the threshold when it is not. It can also be the gas control valve itself beginning to fail.
There is one more possibility worth naming: many heaters built in the last fifteen years have a thermal switch on the combustion chamber that latches off if the unit overheats. If that has tripped, the heater is telling you something is wrong with its air supply or venting — and resetting it repeatedly without finding out why is the wrong response.
Where to stop
Cleaning the intake screen, checking the thermocouple position, and giving the knob a proper 30 seconds are all reasonable things to do yourself.
Stop and call if: you smell gas at any point, the flame is yellow and stays yellow after the intake is clean, the thermal switch has tripped, the pilot will not hold after a new thermocouple, or you find soot around the top of the heater or on the wall behind it. Soot outside the combustion chamber means exhaust is coming into the room rather than going up the flue, and that is a carbon monoxide question, not a hot water one.
Also worth knowing: a heater well past twelve years old that has started dropping its pilot is often telling you where it is in its life. We would rather say that plainly than fit a part into a tank that is close to the end.