Expansion tanks are installed in hot-water heating systems to provide for the expansion and contraction of the water as it changes in temperature. Water expands with the rise of temperature, and the excess volume of the water flows into the expansion tank.

Another feature of the expansion tank is that the boiling point of the water can be increased by elevating the tank. In other words, increasing the head (i.e. the difference in elevation between two points in a body of fluid) increases the pressure. As a result, the water can be heated to a higher temperature without generating steam, which in turn causes the radiators or other heat emitting devices to give off more heat.

There are both open and closed types of expansion tanks used in hot-water heating systems. The open expansion tank is used on low-pressure systems and the closed tank on high-pressure systems; air in the tank above the water forms a cushion for increasing the pressure. As the temperature of the water rises, it expands and flows into the tank, thus compressing the air and increasing the pressure.

The relation between pressure and volume changes of the air should be understood. According to Boyle's Law, at constant temperature the pressure of a gas varies inversely as its volume. Thus, when the volume is reduced to half, the pressure is doubled. This is not gauge pressure, but absolute pressure (the pressure measured from true zero or point of no pressure).

In gravity hot-water heating systems, either closed or open piping arrangements can be used. In an open gravity system, the expansion tank is located at the highest point in the system (e.g. rood, attic, top floor, etc.). The expansion tank used in this piping arrangement is an open type with an overflow pipe located at the top. Provisions can be made to return the overflow water to boiler or to discharge it through outside run-off drains.

In a closed gravity system, a closed, airtight expansion tank is located near the hot-water boiler. Higher pressures (and, consequently, higher water temperatures) result as pressure builds up in the system. Pressure relief valves are installed on the main supply line to prevent the buildup of too much pressure.

Forced (hydronic) hot-water heating systems are closed systems with expansion tanks located near the boiler.