With the notable achievements attained through the implementation of steam-assisted gravity drainage (SAGD), the vertical–horizontal steam drive (VHSD) emerges as a pivotal technological advancement aimed at significantly enhancing the efficiency of thin reservoir heavy oil recovery subsequent to steam cyclic stimulation. The inclusion of nitrogen assistance has proven effective in enhancing the efficacy of gravity drainage techniques in reservoir development. However, it is noteworthy that this method has only led to improvements in approximately 50% of the well groups within the observed field. The comprehensive evaluation index of VHSD was proposed, and as the objective function, it was determined that the greatest contribution to the VHSD technique lies in oil saturation, accounting for 40% of the overall evaluations. This differs from conventional SAGD operations, where reservoir thickness serves as the primary determinant. Building upon an enhanced physical simulation similarity criterion, two comparative injection scheme experiments were conducted to explore the impact of nitrogen injection on the performance of VHSD and the characteristics of the steam chamber. Nitrogen is distributed in the vicinity of the steam chamber, leading to the formation of a dual mechanism characterized by ‘top heat insulation and lateral traction’ on the steam chamber. The lateral traction accounts for approximately 25% of the team chamber volume. Additionally, the inducement of nitrogen causes a downward displacement of crude oil, resulting in its accumulation within the high-temperature region of the steam chamber. This, in turn, enhances the contact area between the high-temperature steam and the crude oil, ultimately leading to improvement in production efficiency. Further validation of the impact of nitrogen on steam lateral traction and interlayer steam drainage within the reservoir was confirmed using Xinjiang oilfield testing. The well temperature increased from 75 °C to 130 °C.