The reduction of LaCoO3 has been studied by XPS. It is shown that the degree of reduction of cobalt is characterized by the peak intensity of shake-up satellite of Co 2p(1/2) level. The reduction of Co3+ to Co2+ in LaCoO2 is appeared at 400 degrees C. When LaCoO3 is reduced by H-2 at 600 degrees C, the cobalt is converted into metallic form, meanwhile the structure of La2O2 is identified by X-ray diffraction. After reduction of LaCoO3 the separation energy between La 3d(5/2) level and its shake-up satellite peak is 3.1 eV and the intensity ratio of shake-up satellite to its parent peak for La 3d(5/2) level is 0.76. These values are approximately same as those of La(OH)(3), but they are different from those La2O2. Therefore, La(OH)(2) is formed on surface after reduction of LaCoO3.