Synthetic aperture radar (SAR) processing was applied to the observation data of Lunar Radar Sounder (LRS), which is an HF sounder which was installed onboard a Japanese lunar exploration orbiter, Kaguya, for the purpose of imaging lunar subsurface structure. A two-media model was introduced to the LRS SAR algorithm to define the reference function of the LRS SAR processing. The LRS SAR algorithm has two free parameters, i.e., dielectric constant of the subsurface medium and synthetic aperture. The effect of these free parameters on LRS SAR imaging was studied by simulation and was verified by actual LRS observation data. A practical guideline for LRS SAR processing was drawn. The dielectric constant of the subsurface medium may be ignored in practice so far as the synthetic aperture is smaller than 10 km. For a larger synthetic aperture case, assumption of a moderate dielectric constant (epsilon = 6 similar to 8) of the subsurface medium is effective in realizing good focusing of deep targets. Finally, taking full advantage of ground processing, advanced processing was attempted. Off-nadir focusing SAR processing proved to be effective in imaging oblique objects whose dominant scattering angle was not the angle toward zenith. Changing the dielectric constant of the two-media model proved to be effective in focusing/defocusing small objects, thus enabling us to localize the object's position as surface or subsurface.