To reduce the consumption of hydrogen when converting heavy oil to light oil, the catalytic cracking of a heavy oil (residue of atmospheric distillation) with steam was examined. Two iron oxide-based catalystsshematite (R-Fe 2 O 3 ) and goethite (FeOOH, denoted herein as FeO X catalyst)swere used. It was found that the heavy oil was converted to a mixture of useful light hydrocarbons (i.e., gasoline, kerosene, and gas-oil) over iron oxide-based catalysts. Moreover, because the FeO X catalyst possessed mesopores with diameters of 6-10 nm, it exhibited higher activity than the R-Fe 2 O 3 catalyst without the production of carbonaceous residue. The catalytic activity could be enhanced by loading ZrO 2 on the FeO X catalyst. From the X-ray diffraction analysis and Mössbauer measurement, it was considered that the active oxygen species generated from H 2 O over ZrO 2 particles spilled over the FeO X surface, where the oxidized decomposition of heavy oil occurred.