Currently orbit determination for lunar satellite is supported by ground stations for remote telemetry, but the distance between lunar satellites and ground stations is too long, signal delay is large. In order to reduce the dependence of navigation systems to ground based operations and achieve more autonomy, an autonomous navigation for lunar satellite using X ray pulsars is proposed. Combined with lunar satellite orbit dynamics equations and pulsars measurement, we discuss the performance of X ray pulsars navigation by analyzing the transformation error of TOA. In addition, the observability of the system is discussed by Piece Wise Constant System (PWCS) theory, and the system is completely observable in the theoretical analysis. The Extended Kalman Filter (EKF) is used to estimate the states. Simulation results show that the navigation system can provide positions and velocities of lunar satellite with a high accuracy. Thus, it is a suitable scheme for autonomous navigation of lunar satellite.