The findings represent the first remote detection of this form of water that originates from deep within the Moon's interior, NASA researchers said.
Earlier studies had shown the existence of magmatic water in lunar samples returned during the Apollo programme.
NASA said scientists using data from the Moon Mineralogy Mapper (M3) instrument aboard the Indian Space Research Organisation's Chandrayaan-1 spacecraft, remotely detected magmatic water, or water that originates from deep within the Moon's interior, on the lunar surface.
M3 imaged the lunar impact crater Bullialdus, which lies near the lunar equator.
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"Compared to its surroundings, we found that the central portion of this crater contains a significant amount of hydroxyl - a molecule consisting of one oxygen atom and one hydrogen atom - which is evidence that the rocks in this crater contain water that originated beneath the lunar surface," Klima said.
In 2009, M3 provided the first mineralogical map of the lunar surface and discovered water molecules in the polar regions of the Moon.
Bullialdus crater is in a region with an unfavourable environment for solar wind to produce significant amounts of water on the surface, NASA said.