Generally a water tower is an elevated structure supporting a water tank constructed at a height sufficient to pressurize a water supply system for the distribution of potable water, and to provide emergency storage for fire protection. [WIKI]
In Germany Wasserturm are part of the List for preservation of sites of historic interest (Denkmalschutz). The one in Prenzlauerberg is the oldest in Berlin, completed in 1877 and in use until 1952.
Below the water tank were the homes of the machinists of the tower, and these apartments in the landmark of Prenzlauer Berg have been then renovated.
At Nazi's time, the water tower was used by the SA as concentration camp for communists, socialists, Jews and others, interned without trial and murdered. Then it was was converted to "SA-Heim Wasserturm", where it was used as a dining room and lounge, and the power house as a dormitory. In autumn 1934 the SA home was closed and started the transformation of the site into a public park, the power house was blown up in June 1935 (at its place there's now a playground).
There's also another small one on the other side and the two are connected.