A thermal storage system for air-conditioning with water as its working substance is proposed and analyzed. Because water is a natural substance, the system has no environmental problems. The system consists of a steam compressor, a condenser, an expansion valve, a separator, two ejectors, an evaporator and a pump. Owing to the pump and ejectors, the compression ratio and the swept volume of the compressor are much smaller than those of a traditional system at lower evaporating temperatures. The new system can be used for ordinary air-conditioning or for thermal storage or both. A numerical simulation has been conducted to analyze the characteristics of the system under different working conditions. The results were compared with those of traditional systems using water or R22 as the working medium.