To adjust a heater control valve, locate the gas valve, do not turn off the gas and rotate the large dial to control the thermostat. Simply line up the dial with the notch at the top.
When using a gas heater, no candles, open flames or smoking should be allowed near it when adjusting the control valve. One of the reasons the control valve may need adjusting is because the calibration on the gas valve may not be correct. To adjust a heater control valve, only the large dial needs to be changed. Keep in mind, newer gas valves rotate in the opposite direction to older ones.
Incorrect calibration can cause setting the dial at "Hot" to provide higher or lower temperatures. While all settings on the dial are approximate, there is a chance that the calibration is far off. To recalibrate, rotate the dial until the temperature of faucet water is correct. If this is done and the temperature of the faucet water begins to fluctuate, then the gas control may be bad, or there may be stacking and/or crossover issues. Besides the "Hot" and "Warm" settings, the dial also has a "Vacation" setting, which leaves the pilot light on and keeps the tank heated to about 50 degrees Fahrenheit to prevent freezing.