Turn off the water heater at the power supply and turn off the water supply at the main water shutoff. Next, drain the tank by attaching a hose to the drain valve.
Remove the heater element when the tank is empty by unscrewing it with the element wrench. Slide out the element, remove the rubber gasket and discard it. Clean off any sediment that's collected on the threads of the element and tank, and place a new gasket on the thread side of the clean element. Next, screw the assembly into the tank. Tighten it with the element wrench.
Refill the tank by closing the drain valve, opening the cold water valve and opening a hot water faucet to expel air. The tank will fill without leaking.