The impact of recycling unconverted residue on slurry-phase hydroconversion performance was investigated in a continuous microscale pilot unit operated in once-through (OTOM) and recycling (ROM) operating modes. Hydroconversion experiments were performed with Safaniya Vacuum Residue at reaction temperatures from 420 to 440 °C, process residence times from 1 to 4 h, and recycling ratios from 25 to 300 vol %. Total pressure and inlet catalyst concentration were maintained constant at 15 MPa and 1000 wt ppm of molybdenum in fresh feed. Residue (RES) conversion, hydrodesulfurization (HDS) rate, and product yields and selectivities obtained in OTOM and ROM were compared from two points of view: those of the overall process and the reactor (single-pass). When the process was operated in ROM, the single-pass performance decreased due to a loss of cracking severity through reduced reactor residence time and dilution of fresh feed by recycled reaction products. These effects also impacted the overall performance at 430 °C. However, by increasing the reaction temperature to 440 °C, the loss of cracking severity was countered, and the overall performance increased. Moreover, the mild reaction conditions generated by the recycling increased the overall production of vacuum gas oil (VGO), C 1 −C 4 gases (GAS), and H 2 S and decreased those of naphtha (NAPH) and distillates (DIST). No coke formation was observed, indicating that the recycling of reaction products, especially VGO, would improve the colloidal stabilization of partially converted asphaltenes. Since large quantities of reaction products were recycled, no reactivity loss could be observed for the unconverted residue.