How do I add an image to a JButton

I think that your problem is in the location of the image. You shall place it in your source, and then use it like this:

  JButton button = new JButton();
  try {
    Image img = ImageIO.read(getClass().getResource("resources/water.bmp"));
    button.setIcon(new ImageIcon(img));
  } catch (Exception ex) {
    System.out.println(ex);
  }

In this example, it is assumed that image is in src/resources/ folder.

@Rogach

and you may like to add:

// to remote the spacing between the image and button's borders
button.setMargin(new Insets(0, 0, 0, 0));
// to add a different background
button.setBackground( ... );
// to remove the border
button.setBorder(null);