The moon offers particular advantages for interferometry, including a vacuum environment, a large stable base on which to assemble multi-kilometer baselines, and a cold nighttime temperature to allow for passive cooling of optics for high IR sensitivity. A baseline design for a Lunar Optical Interferometer (LOI) which exploits these features is presented. The instrument operates in the visible to mid-IL region, and is designed for both astrometry and synthesis imaging. The design uses a Y-shaped array of 12 siderostats, with maximum arm lengths of about 1 km. The inner siderostats are monitored in three dimensions from a central laser metrology structure to allow for high precision astrometry. The outer siderostats, used primarily for synthesis imaging, exploit the availability of bright reference stars in order to determine the instrument geometry. The path delay function is partitioned into coarse and fine components, the former accomplished with switched banks of range mirrors monitored with an absolute laser metrology system, and the latter with a short cat's eye delay line. The back end of the instrument is modular, allowing for beam combiners for astrometry, visible and IR synthesis imaging, and direct planet detection. With 1 m apertures, the instrument will have a point-source imaging sensitivity of about 29 mag; with the laser metrology system, astrometry at the microarcsecond level will be possible.