Abstract: Considering the condensation process at the initial stage as a generalized adiabatic process and the latent heat of condensation as an inseparable part of the total potential energy of a closed system, we have studied the fundamental thermodynamic properties of the saturated moist air. The results show that all the properties of the dry air could he retained in the saturated moist air, provided the air temperature T is replaced by the so-called generalized temperature T* as an independent variable.