Catalytic upgrading heavy oil as one of the important in-situ upgrading technologies has attracted worldwide interest for exploitation. Therefore, alkali-treated Fe/ZSM-5 catalyst for upgrading heavy oil was prepared by alkali treatment and ion exchange. 0.4 wt% alkali-treated Fe/ZSM-5, 1 wt% biomass, and 5 wt% glycerol were added into heavy oil (22,300 mPa"s measured at 50 degrees C) for reaction at 310-370 degrees C at 10 degrees C step size for 30 min. Compared with pyrolysis reaction under the same condition, the optimal viscosity reduction was increased by 81% at 350 degrees C. Physical properties of the catalysts before and after treatments were characterized by BET, ICP, XRD, Pyridine-IR. Besides, the structures and the group compositions of heavy oil samples before and after reactions at 350 degrees C were analyzed by SARA, FT-IR, EL, NMR, GC MS. It was found that alkali-treated Fe/ZSM5 with larger specific area, larger amount of Bronsted acid sites, larger total pore volume, and larger average pore diameter compared with Na/ZSM-5 could have a positive impact on the upgrading heavy oil. Furthermore, it could be concluded that the reduction of its viscosity was mainly caused by the severely destroyed structure of resin in the process of the reaction. Meanwhile, the synergistic effect of alkali-treated Fe/ZSM-5 with glycerol and biomass was proposed and confirmed in this paper.