Catalytic cracking of oil sand bitumen with zirconia-alumina-iron oxide catalyst in a steam atmosphere was examined to produce light oil. The experiment was carried out using a fixed-bed reactor, and bitumen diluted with toluene was fed to the reactor. Heavy oil fraction was oxidatively cracked with the active oxygen species generated from steam over the catalyst. Hence, large amounts of light oil, such as gasoline, kerosene, and gas oil, were produced. However, some coke formed after the reaction of bitumen, while coke did not form in case of atmospheric-residual oil (AR). It was supposed that coke formed because the amount of Conradson carbon residue of bitumen is larger than that of AR. To enhance the reaction of heavy oil fraction with the active oxygen species over the catalyst, 1-mthylnaphthalene was used as solvent instead of toluene. As a result, coke was not formed.