Sulfur water is a condition where the running water contains a high amount of hydrogen sulfide gas that escapes into the air when the plumbing line is opened, giving a distinct "rotten egg" smell.

Hydrogen sulfide is the chemical compound with the formula H2S.  This colorless, toxic and flammable gas is partially responsible for the foul odor of rotten eggs, or flatulence, in well water.  It often results from the bacterial break down of sulfites in nonorganic matter in the absence of oxygen, such as in swamps and sewers (anaerobic digestion).  It also occurs in volcanic gases, natural gas and well waters, as discussed here.  In well water cases, ozone is often used for its removal.  An alternative method uses a filter with manganese dioxide.  Both methods oxidize sulfides to less toxic sulfates.  Potassium Permanganate (Pro Pot Perm) is commonly used in a Greensand filter to neutralize the rotten egg smell of "sulfur water".

Hydrogen sulfide is a highly toxic and flammable gas.  Being heavier than air, it tends to accumulate at the bottom of poorly ventilated spaces.  Although very pungent at first, it quickly deadens the sense of smell, so potential victims may be unaware of its presence until it is too late.