The general mechanism of an air compressor is a piston or rotary component (e.g. rotary screw or vane) that draws in air flow, which is compressed into a storage container. Water Lubricated Air Compressor Naturally, because the piston or rotary element needs to move consistently and smoothly because of this to function, it generally must be lubricated.
In a lubricated air compressor, there is lubricating oil which will keep the piston or rotary element running well without damaging the system. The lubricant also really helps to dissipate high temperature and maintain air compression efficiency.
Oil-free air compressors also use a piston or rotary element, however they bypass the lubrication problem by coating the compression component with a pre-lubricating materials like Teflon. Some oil-free compressors could also 
use water in place of essential oil for the lubricating and cooling procedure. These alternate materials secure the pump and invite the mechanism to go smoothly with no need for any oil-based or synthetic lubrication.
