I believe it opens and closes the coolant flow through the heater when you want it... . I noticed a wiff of coolant the other day when I went from the off position to the on position when running down the highway, I have not checked as it went right away, and I have never seen drips on or around it(if Im lucky it was the car I was following)... I have had vehicles with valves that leak occasionally when cycled, if it leaks continually I would replace/repair it.