The effect of water vapor addition on the ignition delay of iso-octane/air mixture was numerically investigated with detailed chemical reaction mechanism. The Chemkin-III was utilized to evaluate the delay time of autoignition for isobaric conditions. By dilution effect and thermal effect, water vapor addition increases the ignition delay time. However, the chemical effect by adding water vapor makes the ignition delay shortened. The ignition delay by the chemical effect is reduced by two ways. Dissociation of water vapor increases the quantities of OH and H. One way is that OH directly makes the rate of iso-octane oxidation reaction 2 increase. The other is that HO2 is produced more by three-body reaction, H+O2+M →HO 2+M, which makes the rate of iso-octane oxidation reaction 3 increase. All trends of three effects are similar according to water vapor addition.