Four catalyst precursors were prepared to assess the performance on the upgrading process of heavy oil. It has been showed that viscosity of Lukeqin heavy oil was decreased significantly, which revealed a viscosity reduction ratio of up to 99.28% with a catalyst precursor concentration of 0.12 wt %, reaction temperature of 365A degrees D and reaction time of 40 min. Analysis of the oil after upgrading showed an obviously change in the composition of hydrocarbon components. The increase of light fractions after reaction improved the properties of heavy oil which is benefit to the pipeline transportation and downstream refining. Meanwhile, the mechanism of upgrading was also investigated. This work proved that heavy oil can be effectively upgraded with the catalyst precursor of petroleum acid iron.