Abstract-A composite reservoir may occur during any enhanced oil recovery project like steam injection into an oil reservoir. Falloff test analysis in steam injection projects offers a quick way to obtain estimates of the swept volume and steam zone properties. Most of the models used for the analysis assume two-region composite reservoirs with different but uniform properties separated by a sharp vertical interface, which is not very realistic. Strange trends seen on the pressure plots and the errors associated with the volume estimates could be related to the simplifying assumptions of the conventional models. The main objective of this paper is to develop a new analytical model for pressure transient analysis to improve previous results with inclusion of more realistic assumptions. The proposed model is a three-region composite model with an intermediate region in which mobility and storativity decrease as power law functions of the radial distance from the front. The fronts are considered to be tilted due to gravity effects. Steam condensation in the form of heat loss from the steam zone is also included in the analytical model. The new sets of type curves for well test interpretation are generated and verified. Effects of several parameters on the shape of type curves are discussed. The developed model can improve estimations of reservoir parameters using type curve matching and explain the anomalies seen on the data, which cannot be described using the conventional models. The general nature of the model makes it applicable to other types of composite reservoirs created either naturally or artificially.