Granulation is necessary before iron ore sintering. The optimum granulation moisture added to the mixture of iron ores, fuel and coke for obtaining suitable size distribution of the granules after tumbled in a drum is of vital importance for the sintering. In order to investigate the optimum moisture content, the moisture capacity of the iron ore, which means the maximum water content held in iron ores of unit mass, is defined and measured in a self-designed apparatus. The relationship between the moisture capacity and some other characteristics of iron ores, which include mineral and chemical composition, size distribution and mineralogy, is discussed. It was found that the mineral composition and the size distribution of the iron ore particles greatly influence the moisture capacity of the iron ores. The moisture capacity of the iron ore was also applied to optimise the granulation by finding the relationship between the moisture capacity of the mixture and the optimum water content. The moisture capacity has positive correlation with the optimum water content. The iron ore, which has high moisture capacity, needs more water added in the granulation process in order to get high permeability. The correlation was given to predict the optimum water content in the granulation based on the moisture capacity measurement.