Water is considered to be a fundamental condition of human’s colonization of the moon. The supply of oxygen is essential to the utilization of most lunar resources. According to the result of rough calculation, the cost for delivering oxygen from earth to moon for a ten-people lunar base will be nearly 5 to 9 billion dollars a year (Schrunk 1999; Taylor and Carrier 1993; Duke 2003). The cost is so high that water cannot be entirely supported by transportation from the Earth. Nevertheless, there are considerable mineral reserves in lunar soil. Compared to transporting water from earth directly, it is more economical to extract it from the lunar soil. The effects of meteorites, solar wind and cosmic ray make most of the lunar surface covered with a layer of lunar soil. The thickness of lunar soil is approximately 4~5 meters at the mare and >10 meters on the highland. The only practical source of water in the lunar soil is igneous minerals which contain typically 40 to 50% oxygen as oxides. The major minerals are ilmenite, anorthite, and olivine. All these oxides can provide oxygen and water to the lunar base even though some of them cannot be easily reduced. Compared with oxides of silicon, aluminum, titanium, calcium or magnesium, it is much more easily to extract oxygen from iron oxide such as ilmenite.