The surface of beta zeolite (SiO2/Al2O3 = 150) was modified using triphenyl silane in a liquid phase, and a series of catalysts was applied in cracking of heavy oil in the presence of steam. Steam reduces the coke formation, but at the same time, zeolite catalysts may be degraded in an aqueous environment at high temperatures. This problem was overcome using the surface-modified zeolite catalyst. The silane treatment of the zeolite surface not only reduced the coke amount but also stabilized the catalyst by increasing the hydrophobicity of the external surface of zeolite. Moreover, an atmospheric residue, which was used as a heavy oil feedstock, effectively decomposed into a lighter hydrocarbon (gasoline, kerosene, and gas oil) over silane-treated beta zeolite. Different reaction times were evaluated for modified beta zeolite in steam-assisted catalytic cracking of the atmospheric residue. The yield of the lighter hydrocarbon (C-7-C-35) was increased significantly up to 50.4 mol % in the product stream over silane-treated catalysts after 2 h of reaction time, while the gasoline production was increased to 35.4 mol % compared to 30.9 mol % over a parent beta catalyst. This indicates an improvement on the stability of beta catalysts after silane treatment.