Abstract: Sr2GdRuO6 which is always used as a precursor in synthesizing superconducting cup rate RuSr2GdCu2O8, prepared by common solid state reaction in air or inO2is always accompanied by the formation of small amounts of ferromagnetic SrRuO3 impurities phase. It is reported in this paper that the pure phase compound Sr2GdRuO6 without any ferromagnetic SrRuO3 impurity phase is successfully prepared via solid state reaction in O2(or air)-water vapor mixed atmosphere. The pure phase compound RuSr2GdCu2O8 without any ferromagnetic SrRuO3 impurities phase is also obtained via analogous solid state reaction system using the pure phase compound Sr2GdRuO6 as a precursor. In addition, the mechanism of the solid state reaction in the presence of water vapor is also discussed. It suggests that the vapor is not beneficial to transformation of SrRuO3 to Sr2GdRuO6, and the effect of water vapor on the solid state reaction is to suppress the formation of SrRuO3 due to the formation of RuO2·nH2O in the water vapor atmosphere.