Tile over plywood?

Lets (apostrophe still not working) try to make this short and sweet. Friends water heater leaks from the top, ruined 80 sq. ft. of parquet over particle board flooring. I found under the particle board, roofing felt then plywood which look good. So we go back with plywood and now homeowner wants to lay tile he bought at the orange big box store where the "tile associate expert of the day" sold him the tile, and the mastic to put the tile on top of the plywood. WHOA NOW! Im no tile man but Im not sure tile goes over plywood. Does tile not go over some type of special underlayment which goes on top of the plywood? Thanks, David