Liquid-phase cracking of vacuum gas oil (VGO) was performed over NiMo supported nonacidic catalysts under 713 K and 8.0 MPa of hydrogen in a batch reactor, which is termed hydro-thermal cracking. Compared with VGO thermal cracking under the same reaction conditions the new process showed the suppressed naphtha yield (from 22.4 to 13.5 wt. %) and VGO conversion (from 65.7 to 64.0 wt. %) and increased the middle distillate yield (from 44.3 to 49.3 wt. %). At the same conversion level, the yield ratio of middle distillates to naphtha for this new process was two times higher than that for VGO hydrocracking. The VGO hydrocracking over USY-supported NiMo proceeded at much lower temperatures but gave higher naphtha yields. Both the thermal cracking and the hydro-thermal cracking of n-dodecyl benzene (C6H5(CH2)(11)CH3) yielded toluene as the major aromatic product, whereas its hydrocracking over NiMo/USY yielded benzene as the major aromatic product. The reaction mechanism of this new process was assumed to consist of thermal cracking of hydrocarbon molecules via the free radical chain mechanism and the catalytic hydroquenching of free radicals.