The overall mechanism of an air compressor is a piston or rotary element (e.g. rotary screw or vane) that allures surroundings, which is compressed into a storage container. Naturally, because the piston or rotary element needs to move consistently and smoothly for this to function, it generally needs to be lubricated.
In a lubricated air compressor, there is lubricating oil which keeps the piston or rotary component running well without damaging the mechanism. The lubricant also helps to dissipate temperature and maintain air compression efficiency.
Oil-totally free air compressors also use a piston or rotary element, but they bypass the lubrication problem by coating the compression element with a pre-lubricating materials like Teflon. 
Some oil-free compressors could also use water instead of oil for the lubricating and cooling procedure. These Water Lubricated Air Compressor alternate materials shield the pump and allow the mechanism to go smoothly with no need for any oil-centered or synthetic lubrication.
