The moisture budget and precipitation mechanism for a stratiform cloud system are investigated based on simulated results of the MM5 model. The lightmedium rainfall caused by the stratiform cloud system occurred in the Henan province during 18-20 October 2002. Both water vapor and hydrometeors are transported through the western and southern boundaries into the Henan region. There is a net inflow at the horizontal direction during the main precipitation period. Every term in the balance equations of the water vapor, hydrometeors or all water substances throughout the Henan region was calculated. The results show that the budgets of water vapor, hydrometeors and all water substances are approximately balanced. The precipitation efficiency of all water substance, condensation efficiency, deposition efficiency, precipitation efficiency of hydrometeors, and precipitation efficiency of water vapor for the Henan region are generally about 33.1%, 27.7%, 13.1%, 69.7% and 31.1%, respectively. The rainfall efficiency of all water substance is similar to that of water vapor because water vapor is predominant in all water substances. The conversion efficiencies among different precipitable particles are evaluated. with the result that more than 58.2% of cloud ice is converted into snow, above 82.1% of snow particles melt, less than 11.1% of snow is converted into graupel, and almost all of graupel melts. Ice water increase is mainly caused by deposition. Most of snow particles are produced by the conversion from ice crystals. Snow increase is due to both deposition and accretion of cloud water with the growth rate of deposition is greater than that of accretion. Rain are formed and increased through the warm cloud and cold cloud processes. The amounts of accretion of cloud water by rain are nearly equal to those of melting of ice-phase particles. The amounts of cloud water auto-converting into rain are relatively small. Therefore, during the main precipitation period, the precipitation is jointly produced by the warm cloud and the cold cloud processes. The proportion of rain amounts finally produced by deposition to the amounts of all of source terms of rain is more than 35%. The ratio of rain amounts ultimately produced by accretion of cloud water by ice phase particles to the amounts of all of source terms of rain is less than 12%. Water vapor plays an important part in production processes of precipitation particles. The proportions of precipitation from the seeded cloud-layer, mixed-phase cloud-layer, and liquid phase cloud-layer to the surface rainfall are about 15%-27%, 45%-50%, and 23%-38%, respectively. The precipitation contribution ratio of the mixed phase cloud-layer to the surface rainfall is the largest because of the increment of ice-phase particles in the cloud-layer.