A water cooler (commonly spelled "watercooler" as a compound word) is a device that cools (most heats too) and dispenses water. They are generally broken up in two categories by water supply: point of use (POU, equally bottleless) water coolers and bottled water coolers.

Bottled water coolers
Bottled water coolers have been around since before the middle of the 20th Century. They are designed to allow bottles to stand conversely in specific connections in the top of coolers (exceptionally some can allow bottles stand upright by using pumps to inhaling water in the reserviors). The bottle size varies with the size of the unit with the larger versions in the US using 5 gallon bottles. The standard size elsewhere is 18.9 litres, and the containers are known in the beverage industry as 'bubble-tops', as bubbles raise and pop as the container fills.

Point of use water coolers
Point of use water coolers are plumbed through directly into the mains water supply, optionally with a filtration system, and not requiring bottles.

The bottled water vs tap water debate has shaped the role of point of use (POU) machines in European hotels, restaurants and catering outlets. This is presenting opportunities for the traditionally office-based usage of mains-fed POU water coolers.

By providing demonstrable cost savings, particularly in high consumption accounts, POU water coolers have thus become a growth phenomenon. Indeed, the European POU industry has turned a corner, reaching a new level of development upon which significant opportunities can be born. An increasing number of companies are turning their attention to these opportunities. Zenith's latest report tracks the POU activities of more than 300 distributors, with profiles on the top 180.

A recent survey conducted by Zenith International indicates the U.S. market for free-standing POU (point of use) water cooler machines increased more than 12 percent during the first half of 2006. The total number of bottleless water coolers in the U.S. now stands at 500,000, according to the survey.

By cooling technology, water coolers can also be divided into two categories: compressor cooling water coolers and semiconductor cooling water coolers. Most people understand compressor cooling as refrigerators and air conditioners are very familiar by us. Then what is semiconductor cooling? It can be called thermoelectric cooling too. The key device is a module - Peltier. Peltier is a miniature solid state heat pump having either a cooling or a heating function. Its principle is a phenomenon called "Peltier Effect" discovered by Peltier in 1834. He discovered that when two metal wires of different materials were joined to form an electrical circuit and a direct electrical current was made to flow through the circuit, one junction became cold and the other junction became hot; when the current direction was reversed, the cold junction got hot while the hot junction got cold. Since then, there have been constant efforts to make use of this principle. Solid state heat pumps became commercially attractive only recently, however, when high performance semi-conductor materials had been developed by early 1960's and the manufacturing technologies of the thermoelectric modules using the materials well developed. The most advantage of compressor cooling water coolers is the quick cooling, but the disadvantage is high cost. Compressor cooling water coolers are very popular in Europe, North America and some tropical countries. Semiconductor cooling water coolers cost much less, but features low cooling efficiency.