Previous estimates of the seismic energy released by lunar events have not properly accounted for instrument bandwidth, variations in corner frequency, and the effects of intense scattering. In this paper, equations are developed that include all of these effects and give realistic estimates for source parameters. These equations are applied to seismograms and displacement spectra from near‐surface and deep moonquakes to obtainM0(seismic moment),Ēs(seismic energy release),Eyr(seismic energy released annually by each lunar event class), Δσ (stress drop), andmb(body wave magnitude). The calculations yieldM0∼ 3 × 1021dyn cm,Ēs∼ 2 × 1017ergs, Δσ ∼ 400 bars, andmb∼ 5.0 for the largest shallow moonquakes; andM0∼ 5 × 1020dyn cm,Ēs∼ 1 × 1013ergs, Δσ ∼ 0.1 bars, andmb∼ 3.0 for large deep events. The average energy released annually isEyr= 2 × 1017erg/yr andEyr= 8 × 1013erg/yr by shallow and deep events, respectively; overall, lunar energy release is dominated by the shallow events. The energy released by the deep events may be accounted for by tidal dissipation, and deep event stress drops are comparable to and smaller than the calculated tidal stresses. A comparison of the above values with those observed terrestrially (Eyr∼ 1025ergs) and with the energy available from heat flow and tidal dissipation emphasizes the importance of tectonic style (e.g., plate tectonics) in determining the chara