The state space corporation Roscosmos said it had lost contact with the craft at 1157 GMT on Saturday after a problem as the craft was shunted into pre-landing orbit. A soft landing had been planned for today.
"The apparatus moved into an unpredictable orbit and ceased to exist as a result of a collision with the surface of the moon," Roscosmos said in a statement. It said a special interdepartmental commission had been formed to investigate the reasons behind the loss of the Luna-25 craft.
Pavel Luzin, an expert on the Russian space programme, said before the mission that Russia needed Luna25 "to demonstrate that it is capable to do something even without the west".
The failure underscored the decline of Russia's space power since the glory days of cold war competition when Moscow was the first to launch a satellite to orbit the Earth - Sputnik 1, in 1957 - and the Soviet cosmonaut Yuri Gagarin became the first man to travel into space in 1961.
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